Reasons to add Consolidated Edison (ED) to your portfolio now – April 6, 2022

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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.

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