On May 28, Zacks Investment Research upgraded energy holding company, SCANA Corp. (SCG) to Zacks Rank #2 (Buy).
Why the Upgrade?
The operating environment and growth prospects seem bright for SCANA, as reflected by rising earnings estimates for this leading Columbia, SC-based company. Over the last 60 days, the Zacks Consensus Estimate for the second quarter of 2013 has increased 20.45% to 53 cents per share.
The momentum has been strong since SCANA released its first quarter earnings results on Apr 25. Earnings per share came in at $1.11, surpassing the Zacks Consensus Estimate of $1.03 and prior-year quarter’s 91 cents. This outperformance was driven by improved electric margins stemming from customer growth and rate increases.
With respect to the earnings trend, SCANA delivered positive earnings surprises in three of the last 4 quarters with an average beat of 6.74%. Moreover, SCANA has been retaining shareholders’ confidence by returning wealth via dividend hikes. In Feb, it increased its quarterly common stock dividend by 2.5% to 50.75 cents per share ($2.03 per share annualized).
Additionally, SCANA is well positioned in a positive regulatory environment, having a low risk business with outstanding customer growth and operational efficiency. These, in turn, are favorable for stable cash flow generation and growth. Another positive for shareholders is SCANA’s utility business mix. The majority of the company’s total earnings come from the regulated electricity and natural gas utilities business.
Other Stocks to Consider
There are certain other electric utility stocks that are also performing well and are worth considering. These include Companhia Paranaense de Energia (ELP) and CPFL Energia S.A. (CPL) with Zacks Rank #1 (Strong Buy) as well as ALLETE Inc. (ALE) with Zacks Rank #2 (Buy).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment