Reasons to Add Pinnacle West Capital (PNW) to Your Portfolio
Pinnacle West Capital Corporation PNW, an electric utility, is enjoying strong economic conditions in Arizona and an expanding customer base is boosting demand for its services.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Estimate Revision
The Zacks Consensus Estimate for 2023 earnings per share is pegged at $4.08, indicating an increase of 1% in the past 60 days.
The Zacks Consensus Estimate for 2024 earnings per share is pegged at $4.78, which indicates a 0.8% growth in the past 60 days.
Debt to Capital
Debt to Capital, at the end of the first quarter of 2023, was 56.22% compared with its industry’s average of 53.79%. This indicates that the company is using higher debt compared with its peers to operate successfully.
However, given the company’s times interest earned ratio and a current ratio of 2.8 and 1.01, respectively, at the end of the first quarter of 2023, indicate the firm’s ability to meet its debt obligations in the near future without any difficulty.
Systematic Investments & Economic Growth
Pinnacle West Capital makes consistent investments to upgrade and maintain the existing infrastructure to provide reliable services 24x7 to its customer base. PNW has plans to invest $5.3 billion in strengthening its transmission and distribution operations in the 2023-2025 period.
PNW’s Metro Phoenix service region continues to witness solid growth in commercial activities. The company expects new investment and the establishment of businesses to increase demand for its services.
Dividend Yield
Utility companies generally distribute dividends. Currently, Pinnacle West Capital has a dividend yield of 4.3% compared with the industry’s 3.5%.
Price Performance
In the past year, the stock has gained 9.5% against the industry’s decline of 8.9%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same industry include DTE Energy DTE, NiSource NI and PPL Corporation PPL, each currently holding a Zacks Rank #2.
DTE, NiSource and PPL’s long-term (three- to five-year) earnings growth is currently pegged at 6.1%, 7% and 7.4%, respectively.
The Zacks Consensus Estimate for 2023 earnings for DTE, NiSource and PPL has moved up 0.3%, 1.9% and 0.6%, respectively, in the past 60 days.
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PPL Corporation (PPL) : Free Stock Analysis Report
NiSource, Inc (NI) : Free Stock Analysis Report
DTE Energy Company (DTE) : Free Stock Analysis Report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
