Reasons to Bet on Public Service Enterprise (PEG) Stock
Public Service Enterprise Group Inc. PEG, a diversified energy company, focuses on providing safe and reliable energy to its customers. The company has solid growth opportunities with its diverse portfolio, long-term capital expenditure plans and financial stability.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The company’s long-term (three to five-year) earnings growth is pegged at 5.5%.
The Zacks Consensus Estimate for PEG’s 2023 earnings per share (EPS) stands at $3.45, up 0.3% in the past 90 days.
The Zacks Consensus Estimate for 2023 sales is pegged at $10.58 billion, implying a year-over-year increase of 7.9%.
The stock boasts an average earnings surprise of 8.4% 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, Public Service Enterprise Group’s ROE is 12.6%, which is higher than the industry’s average of 5.4%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Debt Position
PEG’s total debt to capital was 56.64% as of Jun 30, 2023, which is better than the industry’s average of 62.16%.
The time-to-interest earned ratio at the end of second-quarter 2023 was 5.8. The ratio, greater than one indicates that Public Service Enterprise Group is in a good position to meet its interest obligations.
Dividend History
Public Service Enterprise Group continues to increase shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is 57 cents per share, resulting in an annualized dividend of $2.28 per share. This indicates a 5.6% increase over the previous year.
PEG’s current dividend yield is 3.75%, better than the Zacks S&P 500 Composite’s 1.7%.
Long-term Growth Plan
Public Service Enterprise Group plans to invest $3.48 billion during 2023. The company expects a capital spending of $15.5 to $18 billion in 2023-2027 to enhance the reliability and resiliency of its transmission and distribution system and meet customer expectations. This will support a compound EPS growth rate of 5-7%.
Price Performance
In the past year, shares of PEG have rallied 11.9% against the industry’s 6.1% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same industry are Vistra Corp. VST, Avangrid Inc. AGR and ALLETE Inc. ALE. VST sports a Zacks Rank #1 (Strong Buy) while AGR and ALE carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vistra’s 2023 EPS is pinned at $3.54, indicating a year-over-year improvement of 220.4%. The Zacks Consensus Estimate for 2023 sales suggests an increase of 47.8% from the 2022 figure.
Avangrid’s long-term earnings growth rate is 4.1%. The Zacks Consensus Estimate for 2023 sales implies an increase of 6.4% from the 2022 figure.
ALLETE’s long-term earnings growth rate is 8.1%. The Zacks Consensus Estimate for 2023 sales indicates an increase of 23.8% from the 2022 figure.
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Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report
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