Consolidated Edisonit’s (OF – Free Report) the ongoing systematic investment plan to strengthen infrastructure, emission reduction plans and effective debt management are likely to boost its long-term performance.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a solid investment choice at the moment. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth projection and historical surprise
Zacks’ consensus estimate for 2022 earnings rose 0.4% over the past 60 days to $4.47 per share. Zacks’ consensus estimate for 2023 earnings has risen 2% over the past 60 days to $4.79 per share.
Consolidated Edison’s long-term (three to five years) earnings growth is projected at 2%.
Consolidated Edison has posted an average surprise profit of 1.4% over the past four quarters.
Dividend
Consolidated Edison has a long history of paying dividends and has paid dividends to its shareholders consecutively since 1972. ED continues to target a dividend payout ratio of nearly 60% to 70% of its adjusted earnings. The new dividend for 2022 is $3.16 per share, which represents an annualized increase of 6 cents from the previous dividend of $3.10 per share.
Currently, Consolidated Edison has a dividend yield of 3.3% compared to the Zacks S&P 500 composite average of 1.5%.
Stable investments and emission reduction
Consolidated Edison continues to follow a systematic capital investment plan for infrastructure development and to maintain the reliability of its electricity, gas and steam delivery systems. Thanks to the $15.7 billion investment plan for the period 2022-2024, Consolidated Edison aims to add renewable energies, strengthen its infrastructure and improve its operations, mainly in the electrical transmission sector.
Consolidated Edison also aims to create a 100% clean energy electric grid by 2040. ED has spent $298 million on renewable electricity projects and plans to invest $1.2 billion in renewable energy projects. clean energy over the period 2022-2024. These strong investments will further strengthen Consolidated Edison’s renewable energy portfolio.
Debt situation
Consolidated Edison’s debt-to-equity ratio at the end of the fourth quarter of 2021 was 53.1% compared to the industry average of 56.5%. This indicates that ED uses relatively lower debts to run the business compared to its peers.
Consolidated Edison’s interest-earned ratio at the end of Q4 2021 was 2.5, which improved sequentially from 2.2 in Q3 2021, indicating that the company has a sufficient financial strength to meet its short-term obligations.
Price performance
Over the past six months, Consolidated Edison has grown 29.3% compared to industry growth of 12.5%.
Image source: Zacks Investment Research
Other actions to consider
Other similarly ranked stocks in the same industry include American (EEA – free report), NMP Resources (NMP – free report) and WEC Energy Group (CME – free report).
Long-term earnings growth for Ameren, PNM Resources and WEC Energy is projected at 7.2%, 5% and 6%, respectively.
Zacks consensus estimate for 2022 earnings per share for Ameren, PNM Resources and WEC Energy increased 5.47%, 4.08% and 4.87%, respectively, year over year. other.
Over the past three months, shares of AEE, PNM and WEC have jumped 7.6%, 3.4% and 4.7%, respectively.
