Reasons to Add NorthWestern (NWE) to Your Portfolio Now
NorthWestern Corp. NWE, an energy company, is focused on providing reliable and affordable energy to its customers. The company has solid growth opportunities with its diverse fleet of electricity and natural gas, regular dividend payments and financial stability.
Let’s explore the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for NWE’s 2023 earnings per share (EPS) is pegged at $3.44, indicating a year-over-year improvement of 8.2%.
The consensus estimate for 2023 sales is pegged at $1.57 billion, indicating a year-over-year improvement of 6.1%.
The company’s long-term (three to five year) earnings growth is pegged at 5.2%.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, NorthWestern ROE is 6.53%, which is higher than the industry’s average of 5.41%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Debt Position
The company’s total debt to capital was 49.73% as of Jun 30, 2023, which is better than the industry’s average of 61.13%.
The time to interest earned ratio at the end of second-quarter 2023 was 2.7, which being greater than one indicates that NorthWestern is in a good position to meet its interest obligations.
Dividend History
NorthWestern continues to increase shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is 64 cents per share, resulting in an annualized dividend of $2.56 per share. NWE’s current dividend yield is 5.23%, which is better than the utility electric power industry’s 3.98%.
Price Performance
In the past year, shares of NWE have lost 1.1% compared with the broader industry’s 11.6% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are TransAlta Corp. TAC and Vistra Corp. VST, each sporting a Zacks Rank #1 (Strong Buy), and Pinnacle West Capital Corp. PNW, holding a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TAC’s 2023 EPS indicates a year-over-year increase of 1,912.5%. The company delivered an average earnings surprise of 107.14% in the last four quarters.
The consensus estimate for VST’s 2023 EPS indicates a year-over-year improvement of 220.4%. The same for sales indicates a year-over-year increase of 47.8%.
PNW’s long-term earnings growth rate is 6.5%. The consensus estimate for the company’s 2023 sales indicates year-over-year growth of 5.2%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
NorthWestern Corporation (NWE) : Free Stock Analysis Report
Vistra Corp. (VST) : Free Stock Analysis Report
