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The Zacks Analyst Blog Highlights: Duke, NextEra, Dominion and Southern

Zacks Equity Research

For Immediate Release

Chicago, IL –September 4, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Duke Energy DUK, NextEra Energy NEE, Dominion Energy D and Southern Company SO.

Here are highlights from Tuesday’s Analyst Blog:

Florida Braces for Hurricane Dorian: Utilities in Focus

Hurricane Dorian continued to batter the coasts of Bahamas on Sep 1 and 2, bringing in heavy rains and wind gusts exceeding 200 miles an hour (per The Wall Street Journal). It hit the Bahamas as a category 5 hurricane but has now weakened to a category 4 storm per the U.S. National Hurricane Center’s (NHC) latest update.

The hurricane — deemed as the strongest this year so far in the world — is projected to make landfall in Florida on late Tuesday and then in Georgia, North and South Carolina in the following days.

Impact on Utilities

In times of natural calamities like hurricanes, the Utility sector tends to suffer. The rampage caused by heavy winds and catastrophic flooding affects transmission lines, forcing thousands to deal with power cuts. Notably, the National Weather Service has warned of hurricane-strength winds, several feet of storm surges and the risk of dangerous flash floods along much of the Florida coastline in the coming days.

No doubt, once the catastrophic storm hits the coast of Florida, utilities’ operations in the state will suffer, resulting in widespread power outage. Considering the fact that Florida is the third most populated city of the United States, demand and subsequently consumption of electricity is also high. Therefore, some of the top utility players of the United States have significant operations in this state.  

Dorian’s estimated impact on the state’s properties is expected to hamper the smooth flow of electricity through the transmission lines.

Utilities in Focus

We have handpicked a few Utility players that have operations in Dorian’s expected pathway and are thus expected to bear the brunt of the storm. In fact, a few of these utilities have announced their emergency infrastructure strengthening initiatives. These utilities carry a Zacks Rank #3 (Hold), which makes them worthy of retention in investors’ portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Duke Energy: This electricity provider expects Dorian to bring tropical force winds that will cause significant damage to its infrastructure and widespread power outages due to flying debris, fallen trees, downed poles and lines. Thus, the company has put nearly 6,500 transmission and distribution personnel in place to support power restoration in Florida, which is nearly three times the typical number of crew in the state.

NextEra Energy: Its subsidiary, Florida Power & Light Company, expects that a large portion of its service area will be impacted by Dorian and may experience power outages for potentially prolonged periods. Thus, it has arranged for nearly 16,000 personnel to work on restoration and is working to get more resources from across the country before the storm's landfall.

Dominion Energy: This Zacks Rank #3 stock has extensive operations in the Carolinas. Per media sources, it has arranged for 40 tree contractors and plans to bring in extra line workers to help with the storm’s aftermath.

Southern Company: This company’s largest electric subsidiary, Georgia Power, is reportedly monitoring the storm, adjusting plans for response and coordinating with emergency partners, including the Georgia Emergency Management Agency and the National Weather Service. It has already activated its storm command center in Atlanta, GA.

Bottom Line

There’s no doubt that utilities in Dorian’s expected pathway are doing their best to restore power in the event of an outage and taking necessary infrastructural initiatives to weather storm effects. However, restoring power after a massive storm can be extremely challenging due to strong winds and widespread flooding. Thus, the infrastructural strength of these utilities will be put to test when the hurricane actually hits. Their share price may also take a hit.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
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Southern Company (The) (SO) : Free Stock Analysis Report
 
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