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Reasons to Add NRG Energy (NRG) Stock in Your Portfolio Now

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NRG Energy, Inc.’s (NRG - Free Report) cost-saving initiatives, acquisitions, service to wide variety of customers and share buyback strategy will support its long-term growth objectives.

Let’s focus on the factors that make this Utility - Electric Power company  an attractive investment option.

Zacks Rank & Price Performance

NRG Energy holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


 

Shares of the company have increased 10% in the past month against the industry’s decline of 5.1%.

Growth Projection & VGM Score

The Zacks Consensus Estimate for 2020 earnings is pegged at $5.58 per share. The bottom-line figure suggests a 40.91% year-over-year increase.

NRG Energy has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Dividend Yield

In the first quarter of 2020, NRG Energy increased the annual dividend rate to $1.20 per share from 12 cents. It expects to achieve an annual dividend growth rate of 7-9% per share over the long term, subject to the board of directors’ approval. On Apr 15, NRG declared a quarterly dividend of 30 cents per share, payable on May 15 to stockholders of record as of May 1. Currently, the dividend yield of the company is pegged at 3.78% higher than Zacks S&P 500 composite’s 2.23%.

Cost-Saving Initiative

NRG Energy has initiated its three-year Transformation Plan in July 2017. This plan is designed to strengthen earnings, increase cost savings and boost shareholder’s value. The plan is on track for $215 million cumulative EBITDA-accretive margin enhancement, which includes $80 million in 2020. In the first quarter, the company’s capital expenditures were $66 million. Estimated capital expenditures for the rest of 2020 is $168 million.

Other Key Picks

Some other top-ranked stocks from the same sector are Sempra Energy (SRE - Free Report) , Vistra Energy Corp (VST - Free Report) and NextEra Energy, Inc. (NEE - Free Report) . All the three stocks carry a Zacks Rank #2.

Long-term earnings growth of Sempra Energy, Vistra Energy and NextEra Energy is pegged at 6.90%, 11.90% and 7.70 %, respectively.

Sempra Energy, Vistra Energy and NextEra Energy have a trailing four-quarter positive earnings surprise of 11.05%, 5.59% and 2.39%, on average, respectively.

Zacks Top 10 Stocks for 2020

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NextEra Energy, Inc. (NEE) - free report >>

NRG Energy, Inc. (NRG) - free report >>

Sempra Energy (SRE) - free report >>

Vistra Corp. (VST) - free report >>

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