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Here's Why You Should Add PPL Stock to Your Portfolio Now
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PPL Corporation (PPL - Free Report) is a diversified utility holding company. Its strategic investments to expand PPL’s clean energy generation capacity and construction of new generation, transmission and distribution projects are likely to boost the company’s performance. Given its growth opportunities, PPL makes for a solid investment option in the utility sector.
Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History of PPL
The Zacks Consensus Estimate for 2024 and 2025 earnings per share (EPS) is pegged at $1.72 and $1.83, respectively, which indicates year-over-year growth of 7.5% and 6.6%.
PPL’s long-term (three to five years) earnings growth rate is 6.82%. It delivered an average earnings surprise of 6.8% in the past four quarters.
PPL Raises Shareholder Value
PPL continues to return value to its shareholders through dividend payments and has been distributing dividends for the past 78 years.
The company distributes dividends to its shareholders on a regular basis. PPL aims to increase its dividend per share by 6-8% and expects the company’s dividend payout ratio to be in the range of 60-65%. Its current dividend yield is 3.16%, which is better than the Zacks S&P 500 composite’s average of 1.47%.
Leverage of PPL
PPL’s total debt to capital at the end of the second quarter was 53.4% compared with its industry average of 60.5%.
The company’s time-to-interest earned ratio at the end of the second quarter was 2.5. The ratio, being greater than one, reflects its ability to meet future interest obligations without difficulties. The decline in interest rates will be beneficial for PPL as this will reduce its capital servicing costs.
PPL’s Investments to Strengthen Operations
PPL expects a regulated capital investment plan of $14.3 billion in 2024-2027. The capital investment for 2024 is expected to be $3.1 billion. The company aims to cut outages further, owing to the ongoing investments.
It continues to make investments to strengthen grid, electricity and gas distribution, electricity transmission and expand clean energy generation capacity. Investments will also be made focused on new technology and support increasing demand from data centers.
PPL’s Initiatives to Lower Emissions
PPL will continue to reduce emissions through the introduction of new carbon capture technology and add more renewable sources to the generation portfolio. It also aims to become carbon neutral by 2050.
PPL is involved in more than 175 research and development projects. It is also in partnership with more than 30 industry and academic partners. These projects are expected to help accelerate low-carbon energy technologies to strengthen network resiliency and build the future grid.
PPL Stock Outperforms Its Industry
Shares of PPL have gained 42% in the past year compared with the industry’s 35.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Image: Bigstock
Here's Why You Should Add PPL Stock to Your Portfolio Now
PPL Corporation (PPL - Free Report) is a diversified utility holding company. Its strategic investments to expand PPL’s clean energy generation capacity and construction of new generation, transmission and distribution projects are likely to boost the company’s performance. Given its growth opportunities, PPL makes for a solid investment option in the utility sector.
Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History of PPL
The Zacks Consensus Estimate for 2024 and 2025 earnings per share (EPS) is pegged at $1.72 and $1.83, respectively, which indicates year-over-year growth of 7.5% and 6.6%.
PPL’s long-term (three to five years) earnings growth rate is 6.82%. It delivered an average earnings surprise of 6.8% in the past four quarters.
PPL Raises Shareholder Value
PPL continues to return value to its shareholders through dividend payments and has been distributing dividends for the past 78 years.
The company distributes dividends to its shareholders on a regular basis. PPL aims to increase its dividend per share by 6-8% and expects the company’s dividend payout ratio to be in the range of 60-65%. Its current dividend yield is 3.16%, which is better than the Zacks S&P 500 composite’s average of 1.47%.
Leverage of PPL
PPL’s total debt to capital at the end of the second quarter was 53.4% compared with its industry average of 60.5%.
The company’s time-to-interest earned ratio at the end of the second quarter was 2.5. The ratio, being greater than one, reflects its ability to meet future interest obligations without difficulties. The decline in interest rates will be beneficial for PPL as this will reduce its capital servicing costs.
PPL’s Investments to Strengthen Operations
PPL expects a regulated capital investment plan of $14.3 billion in 2024-2027. The capital investment for 2024 is expected to be $3.1 billion. The company aims to cut outages further, owing to the ongoing investments.
It continues to make investments to strengthen grid, electricity and gas distribution, electricity transmission and expand clean energy generation capacity. Investments will also be made focused on new technology and support increasing demand from data centers.
PPL’s Initiatives to Lower Emissions
PPL will continue to reduce emissions through the introduction of new carbon capture technology and add more renewable sources to the generation portfolio. It also aims to become carbon neutral by 2050.
PPL is involved in more than 175 research and development projects. It is also in partnership with more than 30 industry and academic partners. These projects are expected to help accelerate low-carbon energy technologies to strengthen network resiliency and build the future grid.
PPL Stock Outperforms Its Industry
Shares of PPL have gained 42% in the past year compared with the industry’s 35.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the industry are FirstEnergy (FE - Free Report) , Entergy (ETR - Free Report) and OGE Energy (OGE - Free Report) . Each of these stocks currently carries a Zacks Rank of 2. You can see the complete list of Zacks Rank #1 (Strong Buy) stocks here.
FirstEnergy’s long-term earnings growth rate is 7.04%. The Zacks Consensus Estimate for 2024 earnings indicates year-over-year growth of 5.5%.
Entergy’s long-term earnings growth rate is 7.33%. The Zacks Consensus Estimate for 2024 earnings indicates year-over-year growth of 6.7%.
OGE Energy’s long-term earnings growth rate is 5.3%. The Zacks Consensus Estimate for 2024 earnings indicates year-over-year growth of 3.4%.