Reasons to Add IDACORP (IDA) to Your Portfolio Right Now
IDACORP Inc.’s IDA ongoing investments are expected to strengthen its infrastructure, which will help boost performance. The company’s cost management and focus on producing more electricity from clean sources act as tailwinds. Given its growth opportunities, IDA 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 IDACORP’s 2023 earnings per share (EPS) has increased 3% to $5.12 in the past 30 days.
The company’s long-term (three-to-five-year) earnings growth is 4.11%. IDA delivered an average earnings surprise of 13.3% 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, IDACORP’s ROE is 9.51%, 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.
Debt Position
At the end of third-quarter 2023, IDA’s total debt to capital was 49.11, much better than the industry’s average of 59.13.
The time to interest earned ratio at the end of third-quarter 2023 was 3.5. The ratio, being greater than one, reflects IDACORP’s ability to meet future interest obligations without difficulties.
Dividend History
The company has been consistently paying dividends to its shareholders. In October 2023, its board of directors approved a 5.1% increase in its quarterly dividend rate. The revised quarterly dividend is 83 cents per share. The company’s new annualized dividend rate is $3.32 compared with the previous annual rate of $3.16 per share. The company’s current dividend payout target is in the range of 60-70%. IDA’s current dividend yield is 3.41%, better than the Zacks S&P 500 Composite’s 1.42%.
Systematic Investments
The company expects reliability-focused projects to drive capital expenditure in the range of $675-$725 million for 2023, up from the previous range of $650-$700 million. The Idaho general rate case filed in June 2023 requests a rate increase of $111 million or 8.61% on average for Idaho customers. IDA expects the new rates, after approval from the commission, to become effective from Jan 1, 2024. This was done to recover more than $3 billion of infrastructure investments made to serve the growing customer base since 2011.
Price Performance
In the past three months, IDA’s shares have risen 1.3% against the industry’s average decline of 5.6%.
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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IDACORP, Inc. (IDA) : Free Stock Analysis Report
