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Reasons to Add DTE Energy (DTE) Stock to Your Portfolio Now
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DTE Energy Corp.’s (DTE - Free Report) disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems boosts its performance. Given its growth prospects, DTE makes for a solid investment option in the Zacks Utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for DTE Energy’s 2024 EPS has increased by a penny to $6.70 per share over the past 60 days. The estimate also suggests a solid 16.9% improvement over the 2023 reported actuals.
The Zacks Consensus Estimate for DTE’s third-quarter of 2024 revenues is pegged at $3.02 billion, which implies a year-over-year increase of 4.6%.
The company’s long-term (three to five years) earnings growth rate is 8.1%. The company delivered an average earnings surprise of 0.77% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, DTE’s ROE is 12.18%, higher than the industry’s average of 10.34%. This indicates that the company has been utilizing funds more constructively than the electricity utility industry.
Debt Position
DTE’s times interest earned ratio (TIE) at the end of the second quarter of 2023 was 2.8. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Currently, DTE’s total debt to capital is 32.39%, much better than the industry’s average of 60.86%.
Dividend History
DTE Energy has been consistently increasing shareholder value by steadily paying dividends. In June 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annualized dividend of $4.08. The company’s current dividend yield is 3.31%, better than the Zacks S&P 500 composite's average of 1.26%.
Systematic Investments
The company aims to invest a total of $25 billion over the next five years, which implies an 8.7% improvement over its prior five-year investment plan. Of this, the company’s DTE Electric subsidiary expects to make capital investments worth $20 billion over the 2024-2028 period.
Apart from its utility operations, DTE continues to make progress in its non-utility business, which provides diversity to its earnings stream. Profitable returns from such investments should enable DTE Energy to duly achieve its long-term operating earnings growth rate of 6-8%.
Price Performance
In the past three months, the DTE stock has risen 10% compared with the industry’s average growth of 4%.
AEP’s long-term earnings growth rate is 6.2%. The Zacks Consensus Estimate for American Electric Power’s 2024 sales is pegged at $20.05 billion, which indicates a year-over-year improvement of 5.7%.
NI’s long-term earnings growth rate is 6%. The company delivered an average earnings surprise of 20.64% in the last four quarters.
OGE’s long-term earnings growth rate is 5%. The Zacks Consensus Estimate for OGE Energy’s 2024 sales is pegged at $3.46 billion, which calls for a year-over-year improvement of 29.5%.
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Reasons to Add DTE Energy (DTE) Stock to Your Portfolio Now
DTE Energy Corp.’s (DTE - Free Report) disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems boosts its performance. Given its growth prospects, DTE makes for a solid investment option in the Zacks Utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for DTE Energy’s 2024 EPS has increased by a penny to $6.70 per share over the past 60 days. The estimate also suggests a solid 16.9% improvement over the 2023 reported actuals.
The Zacks Consensus Estimate for DTE’s third-quarter of 2024 revenues is pegged at $3.02 billion, which implies a year-over-year increase of 4.6%.
The company’s long-term (three to five years) earnings growth rate is 8.1%. The company delivered an average earnings surprise of 0.77% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, DTE’s ROE is 12.18%, higher than the industry’s average of 10.34%. This indicates that the company has been utilizing funds more constructively than the electricity utility industry.
Debt Position
DTE’s times interest earned ratio (TIE) at the end of the second quarter of 2023 was 2.8. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Currently, DTE’s total debt to capital is 32.39%, much better than the industry’s average of 60.86%.
Dividend History
DTE Energy has been consistently increasing shareholder value by steadily paying dividends. In June 2024, DTE announced a quarterly dividend of $1.02 per share, resulting in an annualized dividend of $4.08. The company’s current dividend yield is 3.31%, better than the Zacks S&P 500 composite's average of 1.26%.
Systematic Investments
The company aims to invest a total of $25 billion over the next five years, which implies an 8.7% improvement over its prior five-year investment plan. Of this, the company’s DTE Electric subsidiary expects to make capital investments worth $20 billion over the 2024-2028 period.
Apart from its utility operations, DTE continues to make progress in its non-utility business, which provides diversity to its earnings stream. Profitable returns from such investments should enable DTE Energy to duly achieve its long-term operating earnings growth rate of 6-8%.
Price Performance
In the past three months, the DTE stock has risen 10% compared with the industry’s average growth of 4%.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are American Electric Power (AEP - Free Report) , NiSource Inc. (NI - Free Report) and OGE Energy Corp. (OGE - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AEP’s long-term earnings growth rate is 6.2%. The Zacks Consensus Estimate for American Electric Power’s 2024 sales is pegged at $20.05 billion, which indicates a year-over-year improvement of 5.7%.
NI’s long-term earnings growth rate is 6%. The company delivered an average earnings surprise of 20.64% in the last four quarters.
OGE’s long-term earnings growth rate is 5%. The Zacks Consensus Estimate for OGE Energy’s 2024 sales is pegged at $3.46 billion, which calls for a year-over-year improvement of 29.5%.