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Reasons to Add Pampa Energia (PAM) to Your Portfolio Right Now
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Pampa Energia S.A.’s (PAM - Free Report) ongoing investments continue to maintain asset quality and help expand its generation portfolio. Through its subsidiaries, PAM continues to expand its operations in the generation, transmission and distribution of electricity in Argentina. Given its strong growth, PAM makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) company a strong investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Pampa Energia’s 2024 earnings per share (EPS) has moved up 14.1% to $7.91 in the past 60 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $1.83 billion, indicating year-over-year growth of 5.6%. The company delivered an average earnings surprise of 81.1% in the last four quarters.
Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Pampa Energia’s ROE is 14.99%, higher than the industry’s average of 9.53%. This indicates that the company has been utilizing its shareholders' funds more constructively (to generate income) than its peers in the electric power utility industry.
Debt Position
Currently, PAM’s total debt to capital is 35.41%, better than the industry’s average of 61.57%.
The time-to-interest earned ratio at the end of the first quarter of 2024 was 2.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Liquidity
PAM’s current ratio is 2.63, better than the industry’s average of 0.78. A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary.
Clean Power Generation
Since 2018, Pampa Energia has been actively developing wind energy, establishing itself as one of Argentina’s leading renewable energy companies. It continues to add more renewable power through inorganic growth and development of MAT ER projects. During first-quarter 2024, the company’s net power generation was 5,928 gigawatt-hour, including hydro, wind and thermal.
Its PEPE VI project is expected to add 140 megawatts (MW) of wind power, with more than $270 million investment. Its progressive commissioning has started and total completion is expected by the fourth quarter of 2024.
Once all ongoing expansions are commissioned, Pampa Energia will operate a total projected capacity of 5,471 MW, of which 427 MW will come from wind energy. Adding clean assets to its portfolio should enable it to generate additional sources of income.
Price Performance
In the past year, Pampa Energia’s shares have risen 2.2% against the industry’s 5.7% decline.
The Zacks Consensus Estimate for VST’s 2024 EPS and sales implies a year-over-year increase of 10% and 15%, respectively.
The Zacks Consensus Estimate for POR’s 2024 EPS and sales implies a year-over-year improvement of 29.8% and 10.2%, respectively.
ED’s long-term (three to five years) earnings growth rate is 7.39%. The Zacks Consensus Estimate for ED’s 2024 EPS implies a year-over-year increase of 5.1%.
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Reasons to Add Pampa Energia (PAM) to Your Portfolio Right Now
Pampa Energia S.A.’s (PAM - Free Report) ongoing investments continue to maintain asset quality and help expand its generation portfolio. Through its subsidiaries, PAM continues to expand its operations in the generation, transmission and distribution of electricity in Argentina. Given its strong growth, PAM makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) company a strong investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for Pampa Energia’s 2024 earnings per share (EPS) has moved up 14.1% to $7.91 in the past 60 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $1.83 billion, indicating year-over-year growth of 5.6%.
The company delivered an average earnings surprise of 81.1% in the last four quarters.
Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Pampa Energia’s ROE is 14.99%, higher than the industry’s average of 9.53%. This indicates that the company has been utilizing its shareholders' funds more constructively (to generate income) than its peers in the electric power utility industry.
Debt Position
Currently, PAM’s total debt to capital is 35.41%, better than the industry’s average of 61.57%.
The time-to-interest earned ratio at the end of the first quarter of 2024 was 2.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Liquidity
PAM’s current ratio is 2.63, better than the industry’s average of 0.78. A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all short-term liabilities, if necessary.
Clean Power Generation
Since 2018, Pampa Energia has been actively developing wind energy, establishing itself as one of Argentina’s leading renewable energy companies. It continues to add more renewable power through inorganic growth and development of MAT ER projects. During first-quarter 2024, the company’s net power generation was 5,928 gigawatt-hour, including hydro, wind and thermal.
Its PEPE VI project is expected to add 140 megawatts (MW) of wind power, with more than $270 million investment. Its progressive commissioning has started and total completion is expected by the fourth quarter of 2024.
Once all ongoing expansions are commissioned, Pampa Energia will operate a total projected capacity of 5,471 MW, of which 427 MW will come from wind energy. Adding clean assets to its portfolio should enable it to generate additional sources of income.
Price Performance
In the past year, Pampa Energia’s shares have risen 2.2% against the industry’s 5.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Vistra (VST - Free Report) , sporting a Zacks Rank #1 at present, and Portland General Electric (POR - Free Report) and Consolidated Edison (ED - Free Report) , carrying a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VST’s 2024 EPS and sales implies a year-over-year increase of 10% and 15%, respectively.
The Zacks Consensus Estimate for POR’s 2024 EPS and sales implies a year-over-year improvement of 29.8% and 10.2%, respectively.
ED’s long-term (three to five years) earnings growth rate is 7.39%. The Zacks Consensus Estimate for ED’s 2024 EPS implies a year-over-year increase of 5.1%.