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4 Utility Stocks Set to Outshine Q1 Earnings Estimates

Jewel Saha

Utilities have been tirelessly providing essential services like electricity, water and natural gas to customers amid the novel coronavirus pandemic that has posed unprecedented health and economic challenges. Some utilities have taken steps to ensure the continuation of services even in the event of non-payment of utility dues.

Utility operators have been extending services so that millions of customers can follow social distancing guidelines and stay at home to contain the spread of this virus rather than feeling anxious about losing utility services in these critical times. The mature Zacks Utility sector is expected to report 3.6% year-over-year earnings growth in first-quarter 2020 on 2% revenue growth.

During the first quarter, utilities are expected to have registered an increase in demand from residential sector, while demand from commercial and industrial sectors is likely to have declined.

The Central Bank’s decision to further lower interest to near-zero levels is expected to have benefited the capital-intensive utility operators to get funds at lower rates than before and use the same to expand their generation capacity and infrastructure.

A top-tier utility operator NextEra Energy NEE reported first-quarter results, with earnings per share and total revenues beating the respective Zacks Consensus Estimate. The company announced that it will carry out capital projects per plans despite coronavirus woes.

Ways to Pick Winners in the Utility Space
        
Choosing the right stock for one’s portfolio from too many participants is certainly a tough job. An easy way to streamline the list is by selecting stocks with a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Per our proprietary methodology, Earnings ESP is a determining factor for zeroing in on stocks with maximum chances of beating on earnings. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

Please check our Earnings ESP Filter that enables you to come across stocks with the potential to outshine earnings estimates this reporting cycle.

Our research shows that stocks with the right combination of the two key ingredients have 70% higher chances of delivering a positive earnings surprise.

For investors seeking to apply this proven model to their portfolio, we have highlighted four Utility stocks that are poised to beat first-quarter earnings estimates.

Our Utility Selections

Charlotte, NC-based Duke Energy Corporation DUK — together with its subsidiaries — operates as an energy company in the United States.

At present, Duke Energy has a Zacks Rank #2 and an Earnings ESP of +0.68%. It is scheduled to announce quarterly numbers on May 12.

You can see the complete list of today’s Zacks #1 Rank stocks here.


Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation price-eps-surprise | Duke Energy Corporation Quote


Oakville, Canada-based Algonquin Power & Utilities Corp. AQN — through its subsidiaries — owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in Canada and the United States.

Algonquin Power & Utilities has a Zacks Rank #2 and an Earnings ESP of +0.68%. It is scheduled to announce quarterly numbers on May 7.
 

Algonquin Power & Utilities Corp. Price and EPS Surprise

Algonquin Power & Utilities Corp. Price and EPS Surprise

Algonquin Power & Utilities Corp. price-eps-surprise | Algonquin Power & Utilities Corp. Quote


New York-based Consolidated Edison, Inc. ED — through its subsidiaries — engages in regulated electric, gas and steam delivery businesses in the United States.

At present, Consolidated Edison has a Zacks Rank #3 and an Earnings ESP of +0.69%. It is scheduled to announce quarterly numbers on May 7.
 

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc price-eps-surprise | Consolidated Edison Inc Quote


Houston, TX, based CenterPoint Energy, Inc. CNP operates as a public utility holding company in the United States.

Currently, CenterPoint Energy has a Zacks Rank #3 and an Earnings ESP of +10.59%. It is scheduled to announce quarterly numbers on May 7.
 

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. price-eps-surprise | CenterPoint Energy, Inc. Quote


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Consolidated Edison Inc (ED) : Free Stock Analysis Report
 
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
Duke Energy Corporation (DUK) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Algonquin Power & Utilities Corp. (AQN) : Free Stock Analysis Report
 
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