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Here's Why You Should Add DTE Energy (DTE) to Your Portfolio

Zacks Equity Research

Earnings estimates for DTE Energy Company DTE have been revised upward in the past 90 days, reflecting analysts’ optimism on the stock. The Zacks Consensus Estimate for 2019 and 2020 earnings has inched up 0.6% and 0.6% to $6.22 and $6.55 per share, respectively.

The company and its subsidiaries are engaged in regulated and non-regulated energy businesses. The company’s two largest regulated subsidiaries are DTE Electric Company and DTE Gas Company. Let’s focus on the factors that make the stock an appropriate pick at the moment.

Capital Investments & Renewable Focus

DTE Energy focuses on capital investments in infrastructure projects. DTE Electric currently expects to make capital investments of $11.3 billion during the 2019-2023 period. DTE Gas projects capital investments worth $2.5 billion in the same time frame.

The company is also investing toward the enhancement of its renewable generation assets. Over the next 15 years, DTE Electric plans to withdraw a portion of its coal-fired generation and boost the natural gas-fired generation as well as renewables mix. DTE Electric has already retired four coal-fired generation units and plans to retire the remaining 13 coal-fired generating units. The subsidiary will withdraw seven through 2023 and the remaining units by 2040. The company plans toreduce methane emissions by 80% at DTE Gas by 2040.

Long-Term Return and Dividend Yield

Shares of the company have gained on a long-term basis. In the past five years, the stock has surged 73.2% compared with the industry’s rise of 14.6%.

The company plans to maintain a stable and regular dividend payout. Management currently expects to generate cash from operations of $2.4 billion for 2019. Such stable financials is likely to enable the company undertake investor-friendly initiatives. Currently, the company has a dividend yield of 2.88% compared with the Zacks S&P 500 composite’s 1.88%.

Zacks Rank & VGM Score

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Earnings Surprise History & Long-Term Growth

The company’s average four-quarter positive earnings surprise is 12.24%.

The company’s long-term (3 to 5 years) earnings growth is pegged at 6%.

Other Key Picks

Some other top-ranked stocks from the same industry are NiSource, Inc NI, Xcel Energy Inc XEL and Consolidated Edison Inc ED, each holding a Zacks Rank of 2.

NiSource pulled off an average positive earnings surprise of 13.41% in the last four quarters. The company’s long-term earnings growth is pegged at 5.90%.

Xcel Energy pulled off an average positive earnings surprise of 2.15% in the last four quarters. The company’s long-term earnings growth is pegged at 5.60%.

Consolidated Edison delivered an average positive earnings surprise of 3.99% in the last four quarters. The company’s long-term earnings growth is pegged at 2%.

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Xcel Energy Inc. (XEL) : Free Stock Analysis Report
DTE Energy Company (DTE) : Free Stock Analysis Report
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