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4 Reasons to Add NorthWestern (NWE) to Your Portfolio Now
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NorthWestern Corporation’s (NWE - Free Report) systematic capital expenditure to strengthen operations, stable customer growth, strong cash flow and dividend payment history make it a solid investment option in the utility space.
The Zacks Consensus Estimate for 2021 earnings per share has moved up 2.3% in the past 90 days to $3.60.
The consensus mark for 2021 revenues is pegged at $1.35 billion, up 12.3% year over year.
Surprise History and Earnings Growth
NorthWestern delivered an average earnings surprise of 18.2% in the last four quarters.
The company’s long-term (three to five years) earnings growth is projected at 4.8%.
Regular Investments & Emission Reduction
After investing $1 billion in the past five years to strengthen clean energy operations, it has plans to invest nearly $2.1 billion in the 2021-2025 time frame to further strengthen electric and natural gas operations.
Systematic investments in clean source additions will enable NorthWestern to meet its 90% carbon reduction target from the electric generation portfolio in Montana by 2045 from 2010 levels. Hydro systems will be a major contributor of clean energy for NorthWestern Corp., followed by wind and solar energy.
Strong Customer Growth & Rising Dividend
NorthWestern has been enjoying the benefits of strong customer additions in electric and natural gas operations over the last decade. The customer growth rate of both businesses is better than the national average, which is resulting in a steady performance of the company. The population increase in its service territories for the 2021-2026 time period is expected to be better than the national average and ensure stable demand for its services.
The company is able to generate steady cash flow and reward shareholders with annual dividend increases. NorthWestern Corp. management has increased dividend annually since 2008 and the current annual dividend rate of $2.48 per share reflects growth of 90.8% from 2008 levels. The company expects its dividend to increase in the range of 3-6% annually and the dividend payout ratio is targeted at 60-70%.
Price Performance
Over the past 12 months, the stock has outperformed the industry.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same sector include Otter Tail Corporation (OTTR - Free Report) , California Water Service Group (CWT - Free Report) and ONE Gas Inc. (OGS - Free Report) . Otter Tail currently sports a Zack Rank #1 while the other two stocks have a Zacks Rank #2 (Buy).
Otter Tail, California Water Service, and ONE Gas delivered an average earnings surprise of 31.79%, 15.36%, and 6.5%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2021 earnings per share of Otter Tail, California Water Service, and ONE Gas has moved up 39.2%, 1.1%, and 0.3%, respectively, in the past 60 days.
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4 Reasons to Add NorthWestern (NWE) to Your Portfolio Now
NorthWestern Corporation’s (NWE - Free Report) systematic capital expenditure to strengthen operations, stable customer growth, strong cash flow and dividend payment history make it a solid investment option in the utility space.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projections
The Zacks Consensus Estimate for 2021 earnings per share has moved up 2.3% in the past 90 days to $3.60.
The consensus mark for 2021 revenues is pegged at $1.35 billion, up 12.3% year over year.
Surprise History and Earnings Growth
NorthWestern delivered an average earnings surprise of 18.2% in the last four quarters.
The company’s long-term (three to five years) earnings growth is projected at 4.8%.
Regular Investments & Emission Reduction
After investing $1 billion in the past five years to strengthen clean energy operations, it has plans to invest nearly $2.1 billion in the 2021-2025 time frame to further strengthen electric and natural gas operations.
Systematic investments in clean source additions will enable NorthWestern to meet its 90% carbon reduction target from the electric generation portfolio in Montana by 2045 from 2010 levels. Hydro systems will be a major contributor of clean energy for NorthWestern Corp., followed by wind and solar energy.
Strong Customer Growth & Rising Dividend
NorthWestern has been enjoying the benefits of strong customer additions in electric and natural gas operations over the last decade. The customer growth rate of both businesses is better than the national average, which is resulting in a steady performance of the company. The population increase in its service territories for the 2021-2026 time period is expected to be better than the national average and ensure stable demand for its services.
The company is able to generate steady cash flow and reward shareholders with annual dividend increases. NorthWestern Corp. management has increased dividend annually since 2008 and the current annual dividend rate of $2.48 per share reflects growth of 90.8% from 2008 levels. The company expects its dividend to increase in the range of 3-6% annually and the dividend payout ratio is targeted at 60-70%.
Price Performance
Over the past 12 months, the stock has outperformed the industry.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the same sector include Otter Tail Corporation (OTTR - Free Report) , California Water Service Group (CWT - Free Report) and ONE Gas Inc. (OGS - Free Report) . Otter Tail currently sports a Zack Rank #1 while the other two stocks have a Zacks Rank #2 (Buy).
Otter Tail, California Water Service, and ONE Gas delivered an average earnings surprise of 31.79%, 15.36%, and 6.5%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2021 earnings per share of Otter Tail, California Water Service, and ONE Gas has moved up 39.2%, 1.1%, and 0.3%, respectively, in the past 60 days.