Reasons to Add Entergy (ETR) to Your Portfolio Right Now
Entergy Corporation’s ETR solid investment plan over the next three years to maintain utility support and upgrade distribution and transmission will further boost its performance. Given its growth opportunities, ETR makes for a solid investment option in the utility sector.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Entergy’s 2023 earnings per share (EPS) has increased 0.3% to $6.73 in the past 60 days.
The company’s long-term (three-to-five-year) earnings growth is 6.43%. ETR delivered an average earnings surprise of 4.4% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Entergy’s ROE is 10.77%, higher than the industry’s average of 7%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Solvency
The times interest earned ratio is a solvency ratio. It is used to measure how well the company can cover its interest obligations. The time-to-interest earned ratio at the end of third-quarter 2023 was 2.8, which being greater than one indicates that ETR is in a good position to meet its interest obligations.
Dividend History
The company has been consistently paying dividends to its shareholders. In October 2023, its board of directors approved a 5.6% increase in its quarterly dividend rate. The revised quarterly dividend is $1.13 per share. The company’s new annualized dividend rate is $4.52 compared with the previous annual rate of $4.28 per share. ETR’s current dividend yield is 4.49%, better than the Zacks S&P 500 Composite’s 1.42%.
Systematic Investments
Entergy has a capital investment plan worth $16 billion to maintain utility support and upgrade distribution and transmission, during the 2023-2026 period. Of the $16 billion capital plan, $7 billion represents transmission and distribution investments. Entergy is also developing its capital investment plan for the 2024-2026 period and currently anticipates making approximately $19.6 billion in capital investments during that period.
Price Performance
In the past three months, Entergy’s shares have risen 5.6% against the industry’s average decline of 4.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Consolidated Edison ED, NiSource Inc. NI, and OGE Energy OGE. Each stock presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for ED’s 2023 EPS indicates an increase of 8.6% from the previous year’s number.
NiSource’s long-term earnings growth rate is 7.15%. The Zacks Consensus Estimate for NI’s 2023 EPS implies an improvement of 8.8% from that recorded in 2022.
OGE Energy’s long-term earnings growth rate is 3.65%. The company delivered an average earnings surprise of 8.3% in the last four quarters.
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NiSource, Inc (NI) : Free Stock Analysis Report
Entergy Corporation (ETR) : Free Stock Analysis Report
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OGE Energy Corporation (OGE) : Free Stock Analysis Report
