Xcel Energy Inc. (XEL) touched a 52-week high of $32.99 per share on Oct 15, with a traded volume of 6.6 million shares. The shares finally closed a tad lower at $32.22 per share.
Xcel Energy posted positive earnings surprises in three of the last four quarters although missing out in the most recent quarter by 4.9%. The average earnings beat of the company in the last four quarter is 0.97% and the long-term earnings growth rate is 4.16%.
The company continues to invest in infrastructural upgrades with an estimated capital expenditure of $2.9 billion in 2014. Over the next five years, Xcel Energy plans to invest $14.1 billion in transmission, generation and distribution projects.
In addition, Xcel Energy is expanding its generation mix to include more renewables. With the U.S. market leaning towards green energy, Xcel Energy’s large-scale clean energy projects will prove beneficial in the long run. The company has set a target of reducing carbon emission by 30% by 2020. The company is expected to complete its two wind projects in 2015 and it has also issued request for proposals for installation of 100 MW of solar power by 2016.
This drive to spur renewables is now seen to be an industry-wide phenomenon. In the face of stringent government regulations, utility companies like Exelon Corp. (EXC), Duke Energy Corp. (DUK) and NRG Energy, Inc. (NRG) are also stepping up their renewable energy portfolio.
The economy in Xcel Energy’s service territory has witnessed significant improvement when compared with the nation as a whole. This optimism in the market converts to higher sales and better performance for the company.
Xcel Energy also looks attractive in terms of valuation, as its price-to-earnings ratio of 16.36 is at a discount to the industry average. The dividend yield of 3.67% also beats its peer average. The overall liquidity position is favorable at $1.5 billion.
Minneapolis, MN-based Xcel Energy is an electricity and natural gas company, with operations in eight states. The company through its four regulated utility subsidiaries serves about 3.5 million electricity customers and almost 1.9 million natural gas customers.
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