Reasons to Add DTE Energy (DTE) to Your Portfolio Right Now
DTE Energy Company’s DTE disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems boosts its performance. The company’s steady investments to enhance renewable generation assets drive its bottom line. Given its growth opportunities, DTE makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for DTE’s 2024 earnings per share (EPS) has increased 0.4% to $6.70 in the past 60 days.
The Zacks Consensus Estimate for 2024 revenues is pinned at $13.87 billion, indicating year-over-year growth of 8.9%.
DTE’s long-term (three- to five-year) earnings growth rate is 6%.
Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, DTE’s ROE is 11%, higher than the industry’s average of 8.69%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Debt Position
Currently, DTE’s total debt to capital is 31.2%, much better than the industry’s average of 61.81%.
The time-to-interest earned ratio at the end of the fourth quarter of 2023 was 3. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
DTE Energy has been consistently increasing shareholders’ value by paying dividends. Currently, DTE’s quarterly dividend is $1.02 per share, resulting in an annualized dividend of $4.08, up 7.1% from the prior-year figure. The company’s current dividend yield is 3.73%, better than the Zacks S&P 500 Composite's average of 1.31%.
Systematic Investments
The company aims to invest a total of $25 billion over the next five years, which implies an 8.7% improvement over its prior five-year investment plan. Of this, DTE Electric currently expects to make capital investments worth $20 billion over the 2024-2028 period.
Apart from its utility operations, DTE continues to make progress in its non-utility business, which provides diversity to its earnings stream. DTE Vantage’s capital investments in the 2024-2028 period are expected to be in the range of $1-$1.5 billion for renewable energy and custom energy solutions.
Price Performance
In the past six months, DTE’s shares have rallied 2.2% against the industry’s decline of 5.5%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are NiSource Inc. NI, Unitil Corporation UTL and TransAlta TAC, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NiSource’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for NI’s 2024 EPS implies an improvement of 6.9% from the bottom line recorded in 2023.
UTL’s long-term earnings growth rate is 7.08%. The Zacks Consensus Estimate for UTL’s 2024 EPS implies an improvement of 3.6% from the bottom line recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS implies a year-over-year decrease of 67.5%. The company delivered an average earnings surprise of 142.6% in the last four quarters.
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