Group 1 - Clearway Energy has outperformed the broader US stock market in 2023, indicating strong performance relative to peers [1] - The company reported strong Q1 results, reinforcing its position as a compelling income vehicle [1] - The focus on safe and growing dividends positions Clearway Energy as an attractive long-only investment opportunity [1] Group 2 - The analyst has extensive experience in both equity and real estate markets, contributing to a well-rounded investment strategy [1] - The analyst's background includes sourcing over $100 million in commercial real estate investments, highlighting expertise in the sector [1] - The emphasis on correlation across asset classes and sectors enhances the ability to provide timely analyses for investors [1]

Core Viewpoint - The article discusses three dividend stocks: Energy Transfer, Clearway Energy, and Starbucks, highlighting their potential for generating passive income and growth opportunities for investors. Group 1: Energy Transfer - Energy Transfer offers a 7.7% dividend yield, positioning it as a strong investment for those optimistic about the U.S. energy sector [4] - The company is expanding its operations to meet increasing domestic energy demand and is involved in significant projects, including a major LNG export terminal in Louisiana [6][7] - CEO Marshall McCrea anticipates important announcements regarding gas supply for data centers, aligning with government initiatives to boost domestic energy production [5] Group 2: Clearway Energy - Clearway Energy has a forward yield of 6.1% and operates a clean energy portfolio of 11.8 GW across 26 states, making it less vulnerable to oil price fluctuations [8][9] - The company has secured long-term power purchase agreements, providing stability in cash flows and supporting its dividend payments [10] - In 2024, Clearway's dividends of $334 million were fully covered by its cash available for distribution, indicating strong financial health [11] Group 3: Starbucks - Starbucks has consistently raised its dividend since 2010, with the current yield approaching 3%, appealing to income-focused investors [12][13] - The company is undergoing a management transition, which has led to recent challenges, but long-term investors may find value at current stock prices [14][17] - The potential resolution of trade tensions could significantly benefit Starbucks, especially given its exposure to the Chinese market [15][16]

Clearway Energy (CWEN) closed the last trading session at $28.61, gaining 2% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $35.83 indicates a 25.2% upside potential.The mean estimate comprises 12 short-term price targets with a standard deviation of $2.08. While the lowest estimate of $32 indicates an 11.9% increase from the current price level, the most optimistic analyst expect ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Clearway Energy (CWEN) as a strong value stock based on its financial metrics and Zacks Rank [2][3][7] Company Metrics - Clearway Energy (CWEN) holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for value investors [3] - CWEN's PEG ratio is 0.58, significantly lower than the industry average of 0.99, suggesting it may be undervalued [4] - The P/B ratio for CWEN is 1.07, compared to the industry's average of 2.25, indicating an attractive valuation [5] - CWEN's P/CF ratio stands at 3.67, well below the industry average of 8.87, further supporting its undervaluation [6] - Over the past year, CWEN's PEG has fluctuated between 0.58 and 7.66, with a median of 1.75, while its P/B has ranged from 0.85 to 1.15, with a median of 1.01 [4][5] - The P/CF ratio has varied from 3.19 to 4.19, with a median of 3.61, reinforcing the stock's solid cash flow outlook [6] Investment Outlook - The combination of CWEN's strong earnings outlook and favorable valuation metrics positions it as an impressive value stock currently [7]

Core Viewpoint - Clearway Energy (CWEN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - Clearway Energy's earnings estimates have shown a significant upward trend, with a 107.5% increase in the Zacks Consensus Estimate over the past three months [8]. Company Performance Indicators - Clearway Energy is projected to earn $1.18 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 57.3% [8]. - The upgrade to Zacks Rank 2 places Clearway Energy in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, while the next 15% receive a 'Buy' rating [9].

Investment Rating - The report maintains a positive outlook on Clearway Energy, reaffirming its guidance for 2025 [1][2]. Core Insights - Clearway Energy reported adjusted net income exceeding consensus expectations, with adjusted EBITDA of $252 million, surpassing the consensus estimate of $237 million [2][3]. - The company reiterated its 2025 fiscal year guidance for cash available for distribution (CAFD) at $400 million to $440 million, with a long-term target of 5%-8%+ growth in CAFD per share post-2027 [1][2]. - Capacity expansion is on track, with a guidance of 1.1 GW for fiscal year 2025 and 2.3 GW for fiscal years 2026-2027, with all domestic equipment in place and funding secured for key projects [1][3]. Financial Performance Summary - For Q1 2025, Clearway Energy reported revenues of $298 million, which is in line with expectations, and a net income of $4 million, compared to a consensus loss of $30 million [2][4]. - The company achieved a gross profit margin of 59% for Q1 2025, reflecting a significant year-over-year increase [4]. - The adjusted EBITDA margin was reported at 85%, indicating strong operational efficiency [4].

Core Insights - Clearway Energy Inc. (CWEN) reported first-quarter 2025 earnings of 3 cents per share, exceeding the Zacks Consensus Estimate of a loss of 25 cents by 112% [1] - Total revenues for the quarter were $298 million, which fell short of the Zacks Consensus Estimate of $311 million by 4.1% [1] Financial Performance - Adjusted EBITDA for the quarter was $252 million, an increase from $211 million in the same period last year [2] - Total operating costs and expenses were $298 million, up 2.1% from $292 million year-over-year, attributed to higher depreciation, amortization, and accretion costs [2] - Interest expenses rose to $116 million compared to $57 million in the year-ago quarter [2] - Net cash provided by operating activities totaled $95 million, up from $81 million in the previous year [6] Acquisitions - On April 25, 2025, the company entered a binding agreement to acquire a 100 MW solar project in California for $120 million to $125 million, which has a revenue contract with an investment-grade utility through 2038 [3] - On April 29, 2025, CWEN closed the acquisition of the 137 MW Tuolumne Wind project in Washington, which has a Power Purchase Agreement (PPA) with Turlock Irrigation District until 2040 [4] Financial Position - As of March 31, 2025, CWEN had cash and cash equivalents of $297 million, down from $332 million as of December 31, 2024 [5] - Total liquidity was $1.325 billion, slightly down from $1.33 billion at the end of 2024 [5] - Long-term debt increased to $7.23 billion from $6.75 billion as of December 31, 2024 [5] Guidance - The company expects 2025 adjusted EBITDA to be in the range of $1.195 billion to $1.235 billion [7] - Cash from Operating Activities is projected to be between $844 million and $884 million for the year [7] - CWEN reaffirmed its guidance for 2025 cash available for distribution (CAFD) in the range of $400 million to $440 million [7]

Core Viewpoint - Clearway Energy reported quarterly earnings of $0.03 per share, surpassing the Zacks Consensus Estimate of a loss of $0.25 per share, and showing improvement from a loss of $0.02 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was 112%, although the company had a negative surprise of -76.92% in the previous quarter [2]. - Clearway Energy's revenues for the quarter were $298 million, which missed the Zacks Consensus Estimate by 4.12%, but increased from $263 million year-over-year [3]. - Over the last four quarters, the company has only surpassed consensus revenue estimates once [3]. Stock Performance - Clearway Energy shares have increased approximately 14.2% since the beginning of the year, contrasting with a -5.5% decline in the S&P 500 [4]. - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call [4]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $444.09 million, and for the current fiscal year, it is $0.74 on revenues of $1.5 billion [8]. - The estimate revisions trend for Clearway Energy is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7]. Industry Context - The Alternative Energy - Other industry, to which Clearway Energy belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [9].

Financial Performance - Total operating revenues for Q1 2025 were $298 million, up from $263 million in Q1 2024, representing a 13.3% increase[20] - Net loss for Q1 2025 was $104 million, compared to a net loss of $46 million in Q1 2024, indicating a significant increase in losses[20] - Earnings per share attributable to Clearway Energy, Inc. Class A and Class C common stockholders was $0.03 in Q1 2025, compared to a loss of $0.02 in Q1 2024[20] - Comprehensive loss attributable to Clearway Energy, Inc. was $2 million in Q1 2025, compared to a comprehensive loss of $4 million in Q1 2024[22] - Net income attributable to Clearway Energy, Inc. for the three months ended March 31, 2025, was $1 million, resulting in basic and diluted earnings per share of $0.03[82] - Net income attributable to Clearway Energy, Inc. for Q1 2025 was $4 million, compared to a net loss of $2 million in Q1 2024[85] Operating Costs and Expenses - Operating costs and expenses totaled $298 million in Q1 2025, compared to $292 million in Q1 2024, reflecting a 2.1% increase[20] - Interest expense rose to $116 million in Q1 2025, compared to $57 million in Q1 2024, indicating increased borrowing costs[20] - The company incurred $21 million in operation and maintenance service expenses for Q1 2025, up from $19 million in Q1 2024[90] - Administrative services expenses amounted to $5 million for the three months ended March 31, 2025, down from $6 million in the previous year[91] - Net expenses under the CEG Master Services Agreement were $6 million for the three months ended March 31, 2025, compared to $1 million in the prior year[93] Dividends and Shareholder Returns - Dividends per Class A and Class C common share increased to $0.4312 in Q1 2025 from $0.4033 in Q1 2024, marking a 6.5% increase[20] - The company declared quarterly dividends of $0.4384 per share for Class A and Class C common stock, payable on June 16, 2025[44] - The company expects to continue paying comparable cash dividends in the foreseeable future based on current circumstances[43] Assets and Liabilities - Total assets increased to $14,647 million as of March 31, 2025, up from $14,329 million at December 31, 2024, representing a growth of 2.2%[24] - Long-term debt rose to $7,231 million as of March 31, 2025, compared to $6,750 million at December 31, 2024, marking an increase of 7.1%[24] - Total liabilities increased to $9,227 million as of March 31, 2025, up from $8,765 million at the end of 2024, a rise of 5.3%[24] - The company’s total stockholders' equity decreased to $5,420 million as of March 31, 2025, from $5,564 million at December 31, 2024, a decline of 2.6%[24] Cash Flow and Operational Efficiency - Net cash provided by operating activities was $95 million for Q1 2025, an increase from $81 million in Q1 2024, reflecting improved operational efficiency[26] - Cash, cash equivalents, and restricted cash decreased to $711 million at the end of Q1 2025 from $963 million at the end of Q1 2024, a decline of 26.1%[26] - The company reported a net cash used in investing activities of $46 million, significantly improved from $203 million in the same period of 2024[26] Acquisitions and Investments - The company acquired the Tuolumne wind facility for approximately $207 million, with an estimated total capital investment of $61 million, including transaction expenses[49] - The acquisition of Luna Valley solar facility involved an initial cash consideration of $18 million, with an expected total capital investment of $90 million upon substantial completion[50] - The Daggett 1 BESS facility acquisition had an initial cash consideration of $11 million, with an estimated total capital investment of $53 million expected[51] - The Rosamond South I solar facility acquisition involved an initial cash consideration of $4 million, with a total estimated capital investment of $21 million[52] Market and Operational Challenges - Clearway Energy, Inc. continues to face risks related to its substantial indebtedness and the ability to access capital markets[15] - The company anticipates continued challenges in achieving profitability due to market conditions and operational costs[13] - The company is focused on expanding its renewable energy portfolio and enhancing operational efficiencies[20] Equity and Investments - The company reported equity in earnings of unconsolidated affiliates of $5 million in Q1 2025, down from $12 million in Q1 2024[20] - The company’s equity investments in affiliates decreased to $300 million as of March 31, 2025, down from $309 million at December 31, 2024[24] - The Company’s equity investments in unconsolidated affiliates totaled $300 million as of March 31, 2025, with significant interests in Desert Sunlight (25%, $213 million) and GenConn (50%, $73 million) [55] Derivative Instruments and Risk Management - The Company recorded derivative assets valued at $127 million and derivative liabilities at $4 million as of March 31, 2025, with energy-related commodity contracts liabilities amounting to $383 million [63] - The Company manages credit risk through established credit approval processes and monitoring of counterparties' credit limits[67] - A significant portion of energy-related commodity contracts are with utilities of strong credit quality, although some counterparties, like PG&E, have credit ratings below investment-grade[68]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted EBITDA of $252 million and CAFD of $77 million, reflecting strong wind resource in California and contributions from 2024 growth investments [22][23] - Capacity factors for the renewable and storage segment improved by 4.7% to 25.7% for solar and by 2.9% to 33.9% for wind [22] - Flexible generation availability improved by 3% to 89.3%, continuing the trend of strong availability and grid reliability in California [22] Business Line Data and Key Metrics Changes - The company continued to advance repowering opportunities, with significant projects like Mount Storm and Goat Mountain on track for completion in 2026 and 2027 [7][12] - The acquisition of Tuolumne Wind and a solar project in California are expected to contribute positively to CAFD growth [10][19] - The company is on pace to complete safe harbor investments for approximately 13 gigawatts of projects that could achieve COD through 2029 [8] Market Data and Key Metrics Changes - The company noted a supportive market for energy value from its gas plants in California, with expected appreciation in energy gross margin creation potential [91] - The late-stage pipeline grew over a gigawatt sequentially, indicating strong project development despite market uncertainties [85] Company Strategy and Development Direction - The company aims to achieve the top half of its 2025 CAFD guidance range through committed investments and operational efficiencies [6][20] - The strategy includes a focus on battery storage projects, with plans to continue executing these projects beyond 2026 [36] - The company is committed to maintaining a disciplined approach to capital allocation, targeting a long-term payout ratio trending towards 70% [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the 2027 CAFD per share growth targets, supported by recent acquisitions and ongoing project developments [11][20] - The company is actively evaluating further third-party M&A opportunities to enhance its growth strategy [21] - Management highlighted the importance of adapting to changes in policy and market conditions to ensure project viability and profitability [68] Other Important Information - The company has implemented a hedging strategy to mitigate interest rate risk associated with refinancing corporate bonds maturing in 2028 [27] - The company is focused on enhancing its wind fleet through capital light contract extensions and repowering initiatives [14] Q&A Session Summary Question: Thoughts on battery storage as part of the pipeline going forward - Management expressed strong confidence in battery technology and its revenue-generating potential, indicating plans to continue executing battery projects beyond 2026 [36] Question: 2025 guidance and potential revisions - Management reiterated the 2025 guidance and indicated that any revisions would depend on the confidence gained from ongoing execution and acquisitions [40][42] Question: Battery supply sourcing outside of China - Management confirmed that they are exploring sourcing options beyond China and are confident in managing tariff impacts through various strategies [49][53] Question: Expected CAFD yields from repowering opportunities - Management indicated that they aim for CAFD yields of at least 10% for repowering investments, aligning with their capital allocation strategy [58] Question: Current M&A market conditions - Management noted a balanced market between buyers and sellers, emphasizing the importance of unique synergies in recent acquisitions [60] Question: Risks associated with permitting for wind projects - Management acknowledged potential risks related to permitting but expressed confidence in their existing permits and project timelines [91]