DTE Energy Company’s DTE investments in infrastructure projects, focus on strengthening the renewable portfolio and gradual recovery of Michigan’s economy bode well.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) utility a promising pick for investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Surprise History & Dividend Yield
DTE Energy delivered an average four-quarter positive earnings surprise of 4.32%.
The current dividend yield of the company is 2.84%, higher than the S&P 500’s average of 1.93% and the industry’s 2.80%.
Price Performance & Long-Term Growth
In a year’s time, shares of DTE Energy have surged 20% compared with the industry’s 14.6% growth.
The company’s long-term (three to five years) earnings growth rate is pegged at 6%.
DTE Energy follows a disciplined capital spending program in a bid to maintain the existing electric and gas infrastructure as well as to upgrade the reliability of these systems. Currently, the company projects capital investments of $11.3 billion over the 2019-2023 period. DTE Gas’ total capital investments over the same period are estimated to be $2.5 billion. Over the next five years, the company plans to accelerate more than $450 million of main renewal capital.
Apart from its utility operation, DTE Energy continues to make progress in its non-utility business, which provides diversity to its earnings stream. The company expects to spend $4-$5 billion over the 2019-2023 period for pipeline investments and expansion, including the NEXUS pipeline, under the Gas Storage and Pipelines segment. Over the same period, Power and Industrial Projects’ capital investments are now expected to be $1-$1.4 billion for investments in cogeneration and industrial energy services, and renewable natural gas (RNG) projects.
DTE Energy is investing steadily toward enhancing its renewable generation assets. Over the next 15 years, DTE Electric plans to withdraw portion of its coal-fired generation and boost the natural gas-fired generation and renewables mix. Already, DTE Electric has retired four coal-fired generation units and plans to retire the remaining 13 coal-fired generating units — seven through 2023 and the remaining units by 2040.
Furthermore, the company has announced its industry-leading plan to reduce methane emissions by 80% at DTE Gas by 2040.
Other Stocks to Consider
Other top-ranked stocks in the Utility sector are Pampa Energia S.A. PAM, NRG Energy, Inc NRG and Avista Corporation AVA. Pampa Energia and NRG Energy sport Zacks Rank #1, while Avista carries a Zacks of 2.
Pampa Energia, NRG Energy and Avista delivered average positive earnings surprise of 143.10%, 11.64% and 0.08%, respectively, in the last four quarters.
The long-term earnings growth rate for Pampa Energia, NRG Energy and Avista is pegged at 20.59%, 36.26% and 3.32%, respectively.
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