Earnings estimates for Exelon Corporation EXC have been revised upward in the past 90 days. The Zacks Consensus Estimate for 2019 has moved 2.3% north to $3.15.
Chicago, IL-based Exelon is a utility services holding company operating through its subsidiaries. It has businesses across 48 states and the District of Columbia in the United States along with Canada. The company has a regulating presence in every stage of the energy operation comprising power generation, competitive energy sales, transmission and delivery.
Let’s focus on the factors that make Exelon a profitable bet.
Price Appreciation: The stock has returned 15.5% in the past 12 months versus the industry’s decline of 0.5%.
Zacks Rank & Surprise History: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its average four-quarter positive surprise is 2.08%. The company’s long-term growth is pegged at 4.58%.
VGM Score: The stock carries 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. Backtested results indicate that stocks with a favorable VGM Score of A or B coupled with a solid Zacks Rank offer the best investment bets.
Strong Cash Flow: Exelon’s strong free cash flow generation capacity will help it lower debt level by more than $3 billion in the next four years. Cash flow generation will also support organic utility growth and enable the company to increase dividend distribution rate.
Investments and Cost Savings: Exelon plans to spend nearly $21 billion over the 2018-2021 period on regulated operations to improve reliability of operations. Such systematic investments in regulated assets will drive 7.4% rate base growth during the period.
Since 2015, the company announced cost reductions of more than $900 million. Cost optimization programs and a planned closure of nuclear plants will lower operating and maintenance expenses. The company is targeting to lower operating and maintenance expenses by 3.7% during the 2018-2021 time frame.
Other Stocks to Consider
Some other top-ranked stocks from the same industry are Ameren Corp. AEE, Duke Energy Corp. DUK and Eversource Energy ES, each carrying a Zacks Rank of 2.
Ameren delivered average earnings surprise of 15.40% in the last four reported quarters. The Zacks Consensus Estimate for 2018 earnings has moved 0.9% north to $3.40 over the past 60 days.
Duke Energy pulled off average positive surprise of 3.18% in the trailing four reported quarters. The Zacks Consensus Estimate for 2018 earnings has been revised 0.4% upward to $4.74 over the past 60 days.
Eversource came up with average beat of 1.42% in the previous four reported quarters. The Zacks Consensus Estimate for 2018 earnings has inched 0.3% up to $3.27 over the past 60 days.
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