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Eversource's Capital Project & Acquisitions to Drive Growth

Zacks Equity Research
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Surging Earnings Estimates Signal Upside for Ranger Energy Services, Inc. (RNGR) Stock

Ranger Energy Services, Inc. (RNGR) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

Eversource Energy ES has gained 1.0% in the last ten days compared with its industry's gain of 0.1%. The company pursues organic growth as well as strategic acquisitions to expand its operations. It is currently focused on upgrading its distribution and utility transmission infrastructure. The company has plans to invest $10.8 billion in the 2018-2021 time period.


Eversource aims to invest nearly $5.7 billion to strengthen its electric and natural gas distribution operations, and has plans to invest nearly $4.1 billion over the 2018-2021 time frame to strengthen electric transmission operations. These regulated investments will help the company boost its earnings per share by 5-7% over the 2018-2021 time frame, from the 2017 level of $3.11.

Eversource is also expanding its renewable energy generation portfolio and lowering its carbon footprints. At present, the company is building 62 megawatts of utility-scale solar assets in Massachusetts.

In addition to organic growth projects, the company is also expanding its operations through strategic acquisitions. The company forayed into water business through the acquisition of Aquarion Water Company in December 2017. This will help the company to explore and benefit from the long-term opportunity that water and wastewater service businesses presently offer.

However, environmental regulations, risks of modification in state and local legislative requirements, and substandard performance by third parties may limit the company's upside.

Eversource Energy has a Zacks Rank #3 (Hold). A few better-ranked stocks in the same industry worth considering are CenterPoint Energy Inc. CNP, Dynegy Inc. DYN and Pinnacle West Capital Corporation PNW, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CenterPoint Energy’s long-term earnings growth is pegged at 5.94%. Its 2018 earnings estimate moved 4.7% in the last 30 days.

Dynegy reported a positive earnings surprise of 103% in the fourth quarter.  Its 2018 earnings estimate moved 29.9% over the last 30 days.

Pinnacle West Capital’s long-term earnings growth is pegged at 2.97%. Its 2018 earnings estimate moved 1.4% in the last 30 days.

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