AIDACORP Co., Ltd.of (Ida – Free report) Continued capital spending, improving economic conditions, customer growth, cost control and a focus on producing more electricity from clean sources are driving its performance.
Long-term (3-5 years) earnings growth for this Zacks Rank 3 (hold) stock is 2.7%. Competition from alternative energy sources and editorial costs in a highly regulated environment is a headwind.
tailwind
IDACORP’s regulated electricity business in Idaho produces a relatively stable and growing revenue stream. A growing customer base, improving economic conditions in the regions it serves and growing demand for clean energy have contributed to the company’s stable performance.
IDACORP forecasts capital expenditures of $2.8 billion over the period 2022-2026. Systematic investments to strengthen its power generation portfolio will enable Idaho Power Hydroelectric Generation to meet the growing demands of its growing customer base. This systematic investment aims to provide Idaho Power’s customers with his 100% clean energy by 2045. By the end of 2021, nearly 61% of the energy mix will consist of clean energy sources.
A continued focus on cost control has allowed the company to keep its rates lower than other power companies. The average industrial and residential rates charged by Idaho Power are well below the national average. The low cost of energy makes it a favorable location for investors setting up new businesses in the region, resulting in increased power demand. The company attracts new customers by offering clean energy, affordability and reliability.
headwind
IDACORP supplies electricity primarily from hydroelectric units. The development of new technologies for generating electricity and the falling costs of generating clean electricity from other alternative energy sources could adversely affect demand for its services.
The company operates in a highly regulated environment and the nature of its business is subject to complex and comprehensive federal, state and other regulations. The company operates several hydroelectric power plants that require relicensing and certain other costs. The permitting process can impose many onerous conditions and can lead to large capital expenditures.
price performance ratio
IDACORP recorded a 1.9% loss compared to Zacks Utility. That’s his 0.5% decline in the electricity industry over the past 12 months.
Image Source: Sachs Investment Research
Stocks to consider
Some high-ranking utilities in the same industry that have well-planned investments to enhance their services include: next generation energy (Hey you – free report), WEC Energy Group (WEC – free report) and PPL Corporation (PPL – free report). All currently have Zacks Rank #2 (Buy).you can see Here is the complete list of today’s #1 (strong buy) Zachs stocks..
NextEra Energy aims to invest between $85 billion and $95 billion between 2022 and 2025 to enhance its infrastructure. NextEra Energy delivers more than 10% earnings per share CAGR from 2021 adjusted EPS of $2.55 to 2025 as it continues to add renewable assets to its generation portfolio and execution across all business segments I expect. NextEra Energy’s long-term (three to five years) earnings growth rate is currently pegged at 9.66%.
WEC Energy invests in cost-effective zero-carbon power generation such as solar and wind. We plan to invest $17.7 billion between 2022 and 2026. WEC plans to build 2,400 megawatts of solar, wind and battery storage between 2022 and 2026 to further strengthen its renewable portfolio. WEC expects earnings per share to improve 6-7% annually through 2026. WEC Energy’s long-term earnings growth is currently pegged at 6.08%.
PPL expects $12 billion in capital spending over the five years from 2022 to 2026 and $2.3 billion in 2022. PPL aims to reduce carbon emissions and become carbon neutral by 2050. The company’s domestic business and current dividend yield are 3.38% better than the Zachs S&P 500 Composite’s yield of 1.73%.
