Market Overview - The S&P 500 index has reached a new all-time high, with the SPDR S&P 500 ETF Trust (SPY) up 5.3% in 2025 after hitting a 52-week low in April [1] - Technology stocks have driven the recent market rally, but utility stocks have also shown impressive gains, with the Utilities Select Sector SPDR Fund (XLU) up more than 7.7% this year [1] Utility Sector Insights - Utilities may not keep pace with technology stocks in a risk-on environment, but they offer steady income and lower volatility, appealing to certain investors [2] - NextEra Energy (NEE) has a strong business model with its regulated utility and renewable energy segments, despite facing potential cuts to renewable energy subsidies [3][4] - NextEra Energy's stock is projected to increase by 17%, with a current dividend yield of 3.16% [5] Company Profiles NextEra Energy - NextEra Energy serves over five million customers in Florida and is a major player in renewable energy generation [3][4] - The company is well-positioned to benefit from the growing electricity demand for AI data centers [5] American Electric Power (AEP) - AEP operates across 11 states, serving over 5.6 million customers, with 90% of its revenue from regulated operations, contributing to its stability [6][7] - AEP's stock has increased by 12.7% in 2025, with projected earnings growth of around 7% in the next 12 months and a dividend yield of 3.58% [9] Dominion Energy - Dominion Energy has undergone a transformation, with 90% of its revenue now from regulated utility operations, leading to a stock increase of 19.5% in the last 12 months [10][11] - The company has a refreshed dividend yield of 4.67% and is projected to have earnings growth of around 6% in the next 12 months [12]

Financial Performance & Growth - Targeted long-term EPS growth of 6%-8% and dividend yield of ~4%[8] - The company forecasts a solid rate base CAGR of ~8% through 2029 off of the 2023 base[8] - Transmission investments are expected to contribute 55% of total AEP earnings in 2025[53] - The company's regulated earned ROE was 93% as of twelve months ended March 31 2025[96] Capital Investments & Financing - The company has a $54 billion base capital plan through 2029 with potential for up to $10 billion of incremental investments[15] - Approximately 85% of the capital plan is being recovered through reduced lag mechanisms[39] - The company completed all anticipated equity needs through a $23 billion equity sale and an expected $282 billion minority interest transmission transaction close[19] - $34 billion or 63% of the capital is allocated to wires and $14 billion or 26% is allocated to regulated new generation including renewables[43, 44] Load Growth & Regulatory Successes - The company anticipates 20+ GW of load growth through the end of the decade, driven by data center and industrial demand[15] - Annual retail load growth of 8%-9% is expected in the 2025-2027 forecast period, adding more than 52 million MWh to retail sales[29] - PJM awarded AEP affiliates with $17 billion in transmission upgrades incremental to the $54 billion base plan[25]

Market Overview - U.S. stock markets experienced a successful June, with the Dow, S&P 500, and Nasdaq Composite increasing by 4%, 5.7%, and 5.7% respectively, closing at record-high levels for the first half of 2025 [1] - Despite this success, the first half of 2025 marked the weakest performance for the indexes since 2022, with potential catalysts for the second half including a U.S.-China trade deal, anticipated interest rate cuts by the Fed, and reduced recession fears [2] Imaginary Portfolio - An imaginary diversified portfolio was created, consisting of five stocks that each gained over 50% in the first half of 2025, with further upside potential indicated by favorable Zacks Ranks [3][4] Company Highlights Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in capital equipment, AI-powered data center infrastructure, and digital commerce, with a focus on product diversification [7] - Expected revenue and earnings growth rates for Jabil are 5.9% and 18.5% respectively for the next year, with a 9% improvement in the Zacks Consensus Estimate for next-year earnings over the last 30 days [9] Howmet Aerospace Inc. (HWM) - Howmet Aerospace is experiencing growth in the commercial aerospace market, supported by robust build rates and recovery in wide-body aircraft, along with strength in its defense aerospace business [10] - Expected revenue and earnings growth rates for Howmet are 8.5% and 29% respectively for the current year, with a 0.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] CVS Health Corp. (CVS) - CVS Health is investing in technology to reduce costs and enhance customer experience, with improved Medicare Advantage star ratings aiding its position [12] - Expected revenue and earnings growth rates for CVS are 3.5% and 12.6% respectively for the current year, with a 2.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [14] Carvana Co. (CVNA) - Carvana's acquisition of ADESA's U.S. operations has strengthened its logistics and auction capabilities, with expectations for year-over-year growth in retail unit sales [15][16] - Expected revenue and earnings growth rates for Carvana are 32.1% and over 100% respectively for the current year, with a 7.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [17] NRG Energy Inc. (NRG) - NRG Energy operates in the energy and home services sector, producing electricity from various sources and expanding operations through both organic and inorganic initiatives [18][19] - Expected revenue and earnings growth rates for NRG are 2.6% and 17% respectively for the current year, with a 2.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [20]

Financial Performance & Growth - Black Hills Corp achieved a solid financial position with a long-term EPS growth target of 4% to 6% off the 2023 base of $3.75 per share[9] - The company targets a 55%-65% dividend payout ratio and has increased its annual dividend for 55 consecutive years[9] - The company is delivering on 2025 earnings guidance, which represents ~5% year-over-year growth, achieving 4%-6% CAGR off 2023 base[11] Capital Investment & Infrastructure - Black Hills Corp has a five-year capital forecast of $4.7 billion for 2025-2029, a 10% increase from the prior five-year plan[11] - The company's capital investment plan includes $2.4 billion for electric utilities and $2.1 billion for gas utilities[93] - The company is undertaking the Ready Wyoming Electric Transmission Initiative, a 260-mile expansion project costing $350 million[33] Data Center & Customer Growth - Black Hills Corp announced 1 GW of data center demand from existing customers, with ~500 MW in the current plan requiring minimal capital[11] - The company expects data center EPS contribution to more than double to 10%+ by 2028[17] - The company's customer count growth is more than double the population growth, with a customer count CAGR of 1.1% from 2019-2024[20, 23] Regulatory & Sustainability - The company is actively executing three to four rate reviews per year, including a filed rate review for Kansas Gas requesting recovery of $17.2 million[11, 18] - Black Hills Corp is committed to reducing GHG emissions intensity 40% by 2030 and 70% by 2040 for electric utilities (2005 baseline)[110] - The company targets Net Zero GHG emissions by 2035 for the natural gas distribution system[110]

Recent investments have strengthened the grid and reduced outages for customers The electric utility serves nearly 680,000 customers in the Upstate region and along the I-77 corridor south of CharlotteGREENVILLE, S.C., July 1, 2025 /PRNewswire/ -- Duke Energy Carolinas today asked South Carolina regulators to perform a public review of the company's current rates. The company last requested a review of base rates for customers in early 2024. Since then, the company has made investments in the things our ne ...

Core Viewpoint - Vistra's stock has seen significant growth over the past year, but recent warnings about the challenges of a nuclear power renaissance in the U.S. may impact future performance [1][4]. Group 1: Stock Performance - Vistra's shares have increased by over 120% in the past year, driven by expectations of rising demand for nuclear power due to AI's energy needs and support from President Trump [3]. - However, shares fell by 4.1% following concerns about the feasibility of the nuclear renaissance plan [1]. Group 2: Nuclear Renaissance Challenges - The target set by President Trump for the Nuclear Regulatory Commission to approve reactor design applications within 18 months is considered aggressive and potentially unrealistic, as typical approval times can extend to five years [4]. - The Journal suggests that any growth in nuclear power supply may come from extending licenses of existing reactors or restarting closed reactors, rather than new constructions [4]. Group 3: Financial Outlook - Analysts project strong earnings growth for Vistra, forecasting over 20% annual growth, which could justify the stock's current valuation of 27.5 times earnings [5]. - Vistra's stock appears approximately 20% cheaper when assessed on free cash flow (FCF) compared to GAAP earnings, with a valuation of 23 times FCF and a modest dividend yield of 0.5% [6].

Company Overview - American Electric Power Company, Inc. is a public utility holding company that generates, transmits, and distributes electricity and natural gas, serving nearly 5.6 million customers across 11 states [12]. - The company has a generating capacity of approximately 23,200 megawatts (MW), with nearly 46% of its capacity being coal-fired as of December 31, 2024 [12]. - The energy generation mix includes approximately 40% from coal and lignite, 22% from nuclear energy, 22% from natural gas and oil, and 16% from renewable sources [12]. Investment Ratings - American Electric Power is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B [12]. - The company has a Momentum Style Score of B, indicating positive momentum in its stock performance, with shares up 0.6% over the past four weeks [13]. Earnings Estimates - One analyst has revised their earnings estimate higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.01 to $5.86 per share [13]. - The company boasts an average earnings surprise of 4.1%, suggesting a history of exceeding earnings expectations [13].

Financial Performance - 2017 - Earnings from continuing operations increased from $232.4 million in 2016 to $284.2 million in 2017[10], which includes a $39.5 million benefit from tax reform[11] - Consolidated earnings increased from $63.7 million in 2016 to $280.4 million in 2017[13], including a $39.5 million benefit from tax reform[14] - Construction Services reported earnings of $53.3 million in 2017[22], including a $4.3 million income tax benefit[23], and record revenues of $1.37 billion[23] - Construction Materials reported earnings of $123.4 million in 2017[25], including a $41.9 million income tax benefit[26] Segment Performance - 2017 - Electric & Natural Gas Utility reported earnings of $81.6 million[17], including a $6.4 million charge from tax reform[17], with increased retail sales volumes for both electric (2%)[17] and natural gas (13%)[17] - Pipeline & Midstream reported earnings of $20.5 million[20], including a $200,000 charge from tax reform[20], reflecting the sale of Pronghorn assets in January 2017[20] Outlook and Guidance - 2018 EPS guidance is projected to be in the range of $1.25 to $1.45[43] - Construction Services anticipates 2018 revenues between $1.45 billion and $1.60 billion[39] - Construction Materials anticipates 2018 revenues between $1.8 billion and $1.9 billion[42] Capital Program and Dividends - The company's total capital forecast for 2018-2022 is $2.323 billion[46], allocated to Utility ($1.508 billion), Construction ($466 million), and Pipeline & Midstream ($349 million)[46] - The company has increased its dividend for 27 consecutive years[50] and has made dividend payments for 80 consecutive years[49, 50]

By securing these deals, NRG Energy is positioning itself to benefit from the significant growth in the data center market, which is expected to drive a surge in electricity demand. Utilities' Potential to Benefit From Data Center Demand Key Takeaways NRG Energy (NRG) is capitalizing on the increasing demand for electricity from data centers by securing new power supply deals and investing in infrastructure to meet that demand. According to an Arizton Advisory & Intelligence report, the U.S. data center mar ...

Core Viewpoint - Dividend-paying stocks are generally considered lower-risk investments compared to non-payers, as they generate sufficient cash to fund growth and return excess to shareholders through dividends [1] Group 1: Black Hills (BKH) - Black Hills operates as a regulated utility with a monopoly on natural gas distribution and electricity in several states, benefiting from government regulation [5][6] - The company has a growing customer base, expanding at twice the rate of the U.S. population, and has a history of increasing dividends for over five decades, achieving Dividend King status [7] - Expected earnings growth of 4% to 6% and a dividend yield of 4.8% make Black Hills an attractive investment opportunity [8] Group 2: Kinder Morgan (KMI) - Kinder Morgan is one of the largest energy infrastructure platforms in the U.S., with stable cash flows supported by take-or-pay contracts that account for 64% of annual cash flows [9][10] - The company anticipates cash flow growth to $5.9 billion this year, sufficient to cover its $2.6 billion dividend outlay and fund capital expenditures with excess free cash flow [11][12] - With $8.8 billion in growth capital projects, primarily in natural gas pipelines, Kinder Morgan has a strong foundation for future dividend increases, having raised its payout for eight consecutive years [13] Group 3: American States Water (AWR) - American States Water is a major water utility serving 1 million consumers across nine states, with a long history of dividend payments since 1931 and 70 consecutive years of increases, making it a top Dividend King [15] - The company has achieved a compound annual growth rate (CAGR) of 8.8% in dividend growth over the past five years and aims for over 7% in the long term, supported by planned capital expenditures [16] - The stable cash flows and growth potential position American States Water as one of the safest and most reliable dividend stocks available, with a current yield of 2.4% [17]