37.41 0.00 (0.00%)
After hours: 4:51PM EDT
|Bid||36.50 x 800|
|Ask||38.75 x 4000|
|Day's Range||37.29 - 37.84|
|52 Week Range||29.34 - 38.70|
|Beta (3Y Monthly)||0.17|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||1.44 (3.78%)|
|1y Target Est||N/A|
So far in 2018, FirstEnergy (FE) has outperformed peer utilities in terms of total returns. FirstEnergy has returned 28% based on stock appreciation and dividend payments. The company’s better-than-expected quarterly earnings and separation of relatively riskier competitive operations has influenced FirstEnergy’s market performance. Currently, FirstEnergy is trading at a dividend yield of 3.8%. The company is expected to pay an annualized dividend of $1.44 per share in 2018.
Will FirstEnergy Stock Continue to Soar? In this part, let’s see where FirstEnergy (FE) stock might go from its current levels. FirstEnergy is trading at $37.41, which is ~2% and 10% above its 50-day and 200-day moving average levels.
Brokerages seem to be bullish on FirstEnergy (FE). One of the top-rallied stocks among the S&P 500 Utilities, FirstEnergy received a target price increase from several brokerage houses. Mizuho Securities raised FirstEnergy’s target price from $36.5 to $39.5 on October 11.
PPL (PPL) stock has a median target price of $31.27—compared to its current market price of $29.56, which indicates an estimated upside of ~6% for the next 12 months.
According to Wall Street analysts’ consensus, FirstEnergy (FE) stock has a median target price of $39.1. The stock’s current market price is $36.90, which indicates a potential upside of 6% over the next 12 months.
On September 21, the implied volatility in FirstEnergy (FE) stock was close to 16%—near its 15-day average. The implied volatility was notably higher than broader utilities and broader markets. A higher implied volatility shows more investor anxiety. Higher implied volatility is usually associated with a fall in the stock and vice versa.
NextEra Energy (NEE), the biggest component of the Utilities Select Sector SPDR ETF (XLU), has rallied more than 10% so far this year. It has significantly outperformed its peers in the last few years.
FirstEnergy (FE) is trading at a dividend yield of 3.9%—higher than most utilities. The Utilities Select Sector SPDR ETF (XLU) offers a yield of 3.3%. FirstEnergy’s five-year average dividend yield is ~4.8%. In the first quarter of 2014, FirstEnergy cut its dividend per share from $0.55 to $0.36 when cash retention became vital. Since then, FirstEnergy hasn’t increased its quarterly dividend. Currently, FirstEnergy is trading at a forward dividend yield of 3.9%.
There was a significant bout of selling in utilities last week. The Utilities Select Sector SPDR ETF (XLU), a representative of the S&P 500 Utilities Index, fell 2.3% as the benchmark Treasury yield rose sharply. Broader markets continued to surge and rose 0.4% in the week. On September 19, the ten-year Treasury yield rose to 3.07%, its four-month high.
Currently, FirstEnergy (FE) stock is trading at a forward PE multiple of 15x—lower than its peers’ average forward valuation of over 16x. FirstEnergy expects its earnings to grow 2.5% next year. FirstEnergy is trading at a forward EV-to-EBITDA multiple close to 9.5x—compared to peers’ average of 11x.
FirstEnergy (FE), a utility under transformation, is one of the top-rallied stocks among the S&P 500 Utilities (XLU). Currently, FirstEnergy is trading 1% and 8% above its 50-day and 200-day moving average levels, respectively. Both of these moving averages could act as a support for FirstEnergy stock in the short term. The stock closed at $36.9 on September 21.
Over the last month, growth of ETFs holding FE is favorable, with net inflows of $17.48 billion. This is among the highest net inflows seen over the last one-year and the rate of additional inflows appears to be increasing.
The utilities sector—one of the most vulnerable sectors to interest rates—fell more than 2% after the benchmark Treasury yields reached a four-month high on September 19. The ten-year Treasury yield has been very strong. The ten-year Treasury yield has risen from 2.86% to 3.07% in September. Broader markets continued to climb and rose 0.1% on September 19.
These utility stocks have offered higher returns than the industry in the past six months and have a higher dividend yield than the S&P 500.
CenterPoint Energy (CNP) looks promising and is likely to reward investors with better returns, courtesy of these four factors.
Almost all utility stocks currently offer unattractive upside potentials due to their recent rallies. Among the S&P 500 utilities, PG&E Corporation (PCG) has a relatively handsome upside potential of almost 12% over the next 12 months. Wall Street analysts have given it a median price target of $51.7 compared to its current market price of $46.3.
Among the largest utilities by market cap, NextEra Energy (NEE), the biggest constituent of the Utilities Select Sector SPDR ETF (XLU), has rallied more than 11% so far this year, outperforming utilities on the whole. NextEra Energy’s superior earnings and dividend growth are some of the factors that differentiate it from its peers. To learn how top utility stocks performed this year and how they seem positioned going forward, read How the Big Utilities Are Placed for the Future.