Alliant Energy Corporation’s LNT earnings estimates have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock post solid first-quarter 2018 results. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 0.5% and 0.4% to $2.12 and $2.25, respectively.
Shares of Alliant Energy have gained 6% in the past three months compared with the Zacks Utility Electric Power Industry’s growth of 2.8%. Alliant Energy currently has a Zacks Rank #2 (Buy).
Let’s focus on the factors that make Alliant Energy a profitable bet.
Earnings: Alliant Energy reported earnings of 52 cents per share in first-quarter 2018, beating the Zacks Consensus Estimate by 1.96%.
Strong Capital Expenditure: Alliant Energy plans to invest $10.4 billion to strengthen its existing operation within the 2018-2026 time frame. These investments will be directed to fortify its electric and natural gas distribution lines, and also to expand its generation assets. The company has successfully completed major construction projects on time and at or below budget, and we expect the company to repeat the same in its ongoing capital projects.
Regulated Operations: Nearly 99% of the company’s earnings are generated from the regulated operations. Alliant Energy’s earnings growth prospects look attractive due to strong state economies in its service areas and compelling prospects for new electric generation capacity. Its geographic location and favorable regulatory developments bode well for long-term earnings growth.
Shifting Focus: Alliant Energy is consistently investing in renewable and natural gas-based electricity generation, and gradually lowering its coal-based generation assets. The combined contribution from natural gas and renewable was 42% in 2005, which is expected to increase to 72% in 2024, eating into coal’s share in electricity production.
Regular Dividend Payment: Alliant Energy’s regulated nature of operation provides strong earnings visibility, enabling the company to increase the dividend rate annually for the last five years.
The company’s quarterly dividend rate is 33.5 cents, resulting in an annualized dividend rate of $1.34 per share, reflecting a dividend yield of 3.29%, much better than the S&P 500’s 1.76%.
Other Stocks to Consider
Investors interested in the same space can also consider other stocks like NRG Energy Inc. NRG, WEC Energy Group WEC and Otter Tail Corporation OTTR. NRG Energy sports a Zacks Rank #1 (Strong Buy) and the other two carry the same rank as Alliant Energy. You can see the complete list of today’s Zacks #1 Rank stocks here.
NRG Energy pulled off an average positive earnings surprise of 507.9% in the last four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 95.8% in the past 90 days.
WEC Energy Group delivered an average positive earnings surprise of 5.1% in the trailing four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 0.3% in the past 90 days.
Otter Tail delivered an average positive earnings surprise of 14.0% in the last four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 5.3% in the past 90 days.
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