PPL Corporation PPL has completed the spin-off of its energy business, thus taking the final step toward its strategy of focusing solely on its regulated utilities in the U.S. and the UK. The spun-off business was combined with private equity firm, Riverstone Holdings, LLC’s generation unit to form Talen Energy Corporation, an independent power producing company in the U.S.
Per the transaction, shareholders of PPL Corp. obtained 65% of Talen Energy's common stock, while shareholders of Riverstone received 35%. PPL’s power plants in Pennsylvania and Montana were also integrated into Talen Energy.
With this spin-off, PPL Corp has successfully streamlined its business to form a regulated utilities company. Earlier, the company had acquired Louisville Gas and Electric, and Kentucky Utilities, as well as expanded its UK operations.
PPL Corp. has reiterated its 2015 guidance of $2.05–$2.25 per share from ongoing regulated utility operations. The company also expects compound annual earnings growth of 4–6% through 2017 with continuous rebuilding and modernization of transmission and distribution networks.
PPL Corp., through its subsidiary PPL Electric, continues to upgrade utility systems in an attempt to expand operations. In the past decade, PPL Electric spent roughly $4.7 billion for modernizing and upgrading its utility delivery infrastructure.
Between 2015 and 2019, PPL Corp.’s estimated capital expenditure (excluding investments in its supply business) stands at around $17.6 billion, including $3.6 billion allocated for 2015. The company’s capital investments are primarily focused on developing and upgrading its generation, transmission and distribution facilities.
Presently, PPL Corporation has a Zacks Rank #2 (Buy). Other favorably placed stocks in the same industry include National Grid plc NGG, RWE AG RWEOY and Alliant Energy Corporation LNT. National Grid and RWE sport a Zacks Rank #1 (Strong Buy), while Alliant Energy Corporation holds a Zacks Rank #2.
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