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The Zacks Analyst Blog Highlights: Shenandoah, AES, Global Water, CenterPoint and ONEOK

Zacks Equity Research
Nucor's (NUE) adjusted earnings were $2.13 per share for second-quarter 2018, which beat the Zacks Consensus Estimate of $2.10.

For Immediate Release

Chicago, IL – April 9, 2018 – 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 Shenandoah Telecommunications Company SHEN, The AES Corporation AES, Global Water Resources, Inc. GWRS, CenterPoint Energy, Inc. CNP and ONEOK, Inc. OKE.

Here are highlights from Friday’s Analyst Blog:

5 Utilities to Shelter Your Portfolio from Trade War Fears

Just when the key indexes ended three straight trading days in the green and market watchers thought that chances of a trade war have finally dimmed after a fearful month, the tables turned. Investors encountered new shockwaves late on Thursday when President Donald Trump announced a new set of $100 billion worth of tariffs against China. Following this announcement, market futures plummeted after the bell.

Renewed fears of a trade war may find investors scurrying toward safe-haven sectors, which have already emerged as preferred investments. One of the most-popular, safe-haven sectors is utilities. This sector comprises companies that provide telephone, gas, water and electricity services. In this context, investors looking for stable dividend and interest income can invest in utilities.

Tariffs on China Could Add Up to $153 Billion

On Thursday night, the President called China’s decision an “unfair retaliation,” and instructed the United States Trade Representative (USTR) to decide whether new tariffs of $100 billion should be imposed on Chinese goods. Trump added that these additional tariffs will be suitable per Section 301 of the Trade Act of 1974 and that the products will be selected accordingly.

Earlier, on Tuesday, the White House announced new tariffs of $50 billion on more than 1,300 new Chinese products. Tariffs of 25% will be imposed on products ranging from aircraft batteries and parts to medical devices and flat-screen televisions. U.S.-China tensions started when Trump initially announced tariffs of around $3 billion on steel and aluminum imports from China in March.

The reason for this war-like situation is China’s staggering $375-billion trade surplus with the United States in 2017, which the Trump administration is looking to reduce by at least $100 billion. Total U.S. tariffs on China now add up to around $153 billion. Following the United States’ tariff announcements, China also retaliated with similar moves.

China Set to “Fight Back”

China is clearly in no mood to sit back when the United States is gearing up to impose new tariffs on its imports. In fact, a spokesperson for China’s Ministry of Commerce said that the country does not want to enter into a trade war with the United States At the same time, China is “not afraid to fight a trade war.” He added that in case the United States sticks to its “protectionist trade practices,” China will not refrain from fighting back and instead will respond with “new comprehensive measures.”

Most recently, China declared that it will levy tariffs on around 106 U.S. products including soybeans, aircraft, chemicals and automobiles, with a total trading value of over $50 billion. Following the announcement of Trump’s steel and aluminum tariffs, China imposed tariffs of $3 billion on 128 American goods, with 15% duty levied on 120 products and 25% duty on other eight goods.

China’s latest tariffs will definitely affect the U.S. economy as the exports to China were significant at $130 billion in 2017. China is the largest importer of soybeans from the United States, which was around $14 billion last year. Additionally, China’s import of aircraft equipment, oil seeds and oleaginous fruits, and motor vehicles was $16.3 billion, $12.4 billion and $10.6 billion, respectively in 2017.

Buy These 5 Utility Stocks

While the recent trade war between the United States and China refuses to find any closure, investors should clearly look for defensive sectors. Utility stocks are good options in this regard. The Utilities Select Sector SPDR (XLU) has advanced 1.8% in a month, becoming one of the few key S&P 500 sectors to end in the green over this period.

We have selected five stocks that are expected to emerge unscathed from the war zone. These stocks also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shenandoah Telecommunications Company is a provider of regulated and unregulated telecommunications services.

This Virginia-based company has a Zacks Rank #1. The expected earnings growth rate for the current year is 76.92%. The Zacks Consensus Estimate for the current year has improved 24.3% over the last 30 days. Shenandoah Telecommunications has gained 7.3% in the last month.

The AES Corporation is a diversified power generation and utility company.

This Virginia-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 10.65%. The Zacks Consensus Estimate for the current year has improved 2.6% over the last 30 days. AES has gained 5.2% in a month’s time.

Global Water Resources, Inc. is a water resource management company.

This Arizona-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 16.67%. Over the last 30 days, the Zacks Consensus Estimate for the current year has improved 16.7%. Global Water Resources has gained 5.6% in one month.

CenterPoint Energy, Inc. is a public utility holding company in the United States based out of Texas.

This Zacks Rank #2 company has an expected earnings growth rate of 13.14% for the current year. The Zacks Consensus Estimate for the current year has improved 0.7% over the last 30 days. CenterPoint Energy has gained 1.9% in a month’s time.

ONEOK, Inc. is a diversified energy company involved in oil and gas production.

This Oklahoma-based company has a Zacks Rank #2. The expected earnings growth rate for the current year is 46.02%. The Zacks Consensus Estimate for the current year has improved 3.6% over the last 30 days. ONEOK has gained 0.7% in a month.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.

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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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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
The AES Corporation (AES) : Free Stock Analysis Report
 
ONEOK, Inc. (OKE) : Free Stock Analysis Report
 
Global Water Resources, Inc. (GWRS) : Free Stock Analysis Report
 
Shenandoah Telecommunications Co (SHEN) : Free Stock Analysis Report
 
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