On Dec 26, 2014, shares of TECO Energy, Inc. (TE) touched a 52-week high of $20.88. The share price finally closed at $20.81, up around 1.4% from the closing price of Dec 24.
TECO Energy’s systematic investments in infrastructure development projects as well as inorganic growth ventures, a steady increase in customer numbers, stable financial position and asset divestment strategy have helped the stock to attain a 52-week high mark. Going forward, these factors are expected to drive the company’s growth.
TECO Energy continues to invest in infrastructure development projects and strategic acquisitions. The company is investing substantially in expanding its operations by strengthening electricity generation, distribution and transmission systems.
TECO Energy completed the acquisition of New Mexico Gas Intermediate, the parent of New Mexico Gas Company, in third-quarter 2014. This transaction enabled TECO Energy to add over 513,000 gas customers to its portfolio, thereby boosting cash inflow.
A steady improvement in Florida’s economy and a lower count of Floridians out of job have boosted TECO Energy’s customer count over the last several quarters. The expansion programs mentioned above will collectively enable the company to serve its increasing customer base.
Add to this a stable financial position, including total liquidity of approximately $0.9 billion as of Sep 30, 2014 and operating cash flow of $0.51 billion during the first nine months of 2014, has helped the utility’s capital spending program.
In addition, TECO Energy is currently in the process of divesting its subsidiary TECO Coal. This transaction will enable the company to utilize the proceeds in several ventures, in sync with its long-term goals.
Apart from investing in growth ventures, a favorable financial profile supports TECO Energy’s other shareholder friendly initiatives, including a regular payment of dividends and an active share repurchase program.
TECO Energy currently has a Zacks Rank #2 (Buy). Other stocks in the same industry worth considering include Black Hills Corp. (BKH), PG&E Corp. (PCG) and Alliant Energy Corp. (LNT). Black Hills and PG&E hold a Zacks Rank #1 (Strong Buy), while Alliant Energy carries the same rank as TECO Energy.
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