Industry Overview - The Zacks Utility-Electric Power industry presents an attractive investment case due to stable cash flows and predictable earnings from regulated business models [1] - The industry is transforming with a global push for decarbonization, leading to increased investments in renewables like solar, wind, and battery storage [2] Company Analysis: Vistra Corp. (VST) - Vistra offers a strong investment case with a diversified generation mix, including natural gas, nuclear, solar, and battery storage, providing stable, carbon-free baseload power [4] - The Zacks Consensus Estimate for Vistra's earnings per share indicates a year-over-year increase of 67.71% for 2026, with long-term growth projected at 18.89% [7][11] - Vistra's return on equity (ROE) is 64.04%, significantly higher than the industry average of 10.7% [11][13] - Vistra is trading at a lower P/E of 18.3X compared to PEG's 18.68X, indicating better value [11][15] Company Analysis: Public Service Enterprise Group Inc. (PEG) - Public Service Enterprise Group presents a solid investment case with regulated utility operations and a strong carbon-free nuclear portfolio [5] - The Zacks Consensus Estimate for PEG's earnings per share implies a year-over-year increase of 8.64% for 2026, with long-term growth projected at 7.05% [10] - PEG's debt-to-capital ratio is 57.88%, lower than Vistra's 75.38%, indicating a more conservative approach to financing [18] Dividend Analysis - PEG has a dividend yield of 3.09%, significantly higher than Vistra's 0.55% and the S&P 500's 1.36%, reflecting stronger cash flow and financial health [20] Summary Comparison - Both Vistra and Public Service Enterprise Group are effectively serving customers and expanding clean power generation assets [21] - Vistra has an edge due to stronger earnings estimates, cheaper valuation, and better ROE, despite PEG's lower debt levels [21]

Industry Overview - The Utility-Electric Power industry is focused on generating and delivering electricity to millions of customers in the U.S., with a strong shift towards cleaner fuel sources and reduced carbon emissions, supported by government initiatives [1] - The industry is investing in grid modernization and infrastructure improvements to enhance resilience against natural disasters like hurricanes, which helps in reducing outages and restoring power more quickly [1] Trends Impacting the Industry - Interest rates have decreased from a range of 5.25-5.50% to 3.75-4.00%, which is beneficial for utilities that rely on capital markets for financing infrastructure investments [4] - The share of U.S. electricity generation from renewables is projected to rise from 23% in 2025 to 28% in 2027, driven by growth in solar and wind capacity, aided by the Inflation Reduction Act [5] - Electricity consumption in the U.S. is expected to increase by 1% in 2026 and 3% in 2027, with prices for electricity also projected to rise across industrial, commercial, and residential sectors [6] Industry Performance - The Utility-Electric Power industry has outperformed the S&P 500 and its own sector over the past 12 months, gaining 24.2% compared to the sector's 21% and the S&P 500's 16.5% [10] - The industry's Zacks Rank is 87, placing it in the top 36% of over 244 Zacks industries, indicating positive near-term prospects [8][9] Valuation Metrics - The industry is currently trading at an EV/EBITDA multiple of 13.24X, compared to the S&P 500's 18.9X and the Utility sector's 12.48X, with historical trading ranges between 12.27X and 21.31X over the past five years [13] Investment Opportunities - NextEra Energy plans to invest over $74 billion through 2029 to modernize infrastructure and increase clean energy generation, with a long-term earnings growth forecast of 8.08% and a dividend yield of 2.67% [19][20] - Ameren Corporation expects to deploy over $26.3 billion in capital from 2025 to 2029, with a long-term earnings growth estimate of 8.52% and a dividend yield of 2.78% [23][24] - Alliant Energy anticipates long-term capital expenditures of $13.4 billion from 2026 to 2029, with a long-term earnings growth forecast of 7.15% and a dividend yield of 3.04% [27][28] - Pinnacle West Capital has a capital investment plan of $8 billion for 2026-2028, with a long-term earnings growth estimate of 3.56% and a dividend yield of 3.95% [31][32]

Industry Overview - Stocks in the Zacks Utility-Electric Power industry present an attractive investment opportunity due to stable cash flows and predictable regulated business models [1] - Domestic utilities operate under long-term power purchase agreements, which help shield revenues from economic volatility [1] - Rising electricity demand and ongoing capital investments are improving operational efficiency, enabling consistent earnings and reliable dividend payments [1] Company Comparisons - NextEra Energy Inc. (NEE) and The Southern Company (SO) are leading U.S. electric utilities investing in renewable energy, positioning them favorably in the transition to cleaner power generation [2] - NEE's regulated utility business, Florida Power and Light, provides stable cash flows, while its unregulated subsidiary focuses on wind and solar generation [3] - Southern Company offers long-term value through regulated operations and a proactive decarbonization strategy, including investments in nuclear power and renewable energy [4] Earnings Growth Projections - The Zacks Consensus Estimate for NEE's earnings per share (EPS) in 2026 indicates year-over-year growth of 7.99%, with long-term growth pegged at 8.08% [6] - For SO, the 2026 EPS growth is estimated at 6.82%, with long-term growth at 7.23% [8] - NEE projects 2026 EPS growth of 8.25% compared to SO's 6.93% [9] Financial Metrics - NEE's current return on equity (ROE) is 12.42%, while SO's is 12.52%, both outperforming the industry average of 10.47% [11] - NEE is trading at a Price/Earnings Forward 12-month ratio of 20.88X, while SO is at 19.36X, compared to the industry's 15.63X [12] - NEE's debt-to-capital ratio is 59.04%, lower than SO's 65.34% [14] Capital Investment Plans - NEE plans over $74 billion in capital investment through 2029 to expand clean energy capacity [17] - SO plans to invest $76 billion in capital expenditures through 2029 to strengthen its operations [17] Dividend Yield - NEE's current dividend yield is 2.71%, while SO's is higher at 3.32% [18] Price Performance - Over the past six months, NEE's stock rose by 15.2%, while SO's shares declined by 6.3% [19] Conclusion - Both NEE and SO are investing strategically in infrastructure to enhance service efficiency and reliability [23] - NEE has a marginal edge over SO in terms of earnings growth estimates, lower debt usage, and better price performance, reflected in its Zacks Rank 2 (Buy) compared to SO's Zacks Rank 4 (Sell) [23]

Core Insights - PPL Corp.'s shares have increased by 4% over the last month, outperforming the Zacks Utility-Electric Power industry, which declined by 2.6% [1][7] - The company serves 3.6 million customers in the U.S. and has repositioned itself as a U.S.-focused energy provider after divesting its international operations [1][4] Investment and Growth Strategy - PPL plans to invest approximately $20 billion through 2028 to modernize its grid, enhance service reliability, and reduce outage risks [2][9] - The company aims to achieve a net-zero energy system by 2050 while lowering emissions from power generation [2] - PPL's capital investment plan includes delivering 7,500 MW of zero-carbon renewable generation, 3,000 MW of natural gas-fired capacity, nearly 2,000 MW of energy storage, and 1,500 miles of new high-voltage transmission lines [12] Financial Performance and Estimates - The Zacks Consensus Estimate for PPL's earnings per share for 2026 has increased by 7.85%, supported by a 5.24% year-over-year increase in sales estimates [14] - PPL's trailing 12-month return on equity (ROE) is 9.08%, which is lower than the industry average of 10.47% [24] - The current P/E ratio for PPL is 18.19X, compared to the industry's 15.55X, indicating that PPL is trading at a premium [26] Dividend Policy - PPL has a history of consistent dividend payments and plans to increase dividends annually by 6-8% at least through 2028, subject to board approval [21][22] - The current quarterly dividend rate is 27.25 cents, resulting in an annual dividend of $1.09 per share, with a dividend yield of 3.07%, which is higher than the industry average of 2.77% [22] Market Position and Outlook - Demand for reliable clean energy is increasing in PPL's service territory, positioning the company to meet this growth through its long-term capital investment program [12][29] - Ongoing cost-reduction efforts aim to lower operating and maintenance expenses by at least $175 million by 2026 compared to the 2021 baseline [13]

Core Viewpoint - NiSource Inc. (NI) is actively modernizing its infrastructure to enhance operational reliability and is transitioning from coal-based units to clean energy assets, making it a strong investment choice in the Utility-Electric Power industry [1] Growth Outlook & Surprise History - The Zacks Consensus Estimate for NI's 2026 earnings per share (EPS) is $2.04, indicating an 8.2% year-over-year growth [2] - The revenue estimate for 2026 is $6.56 billion, reflecting a 4.8% year-over-year improvement [2] - NI's long-term earnings growth rate is projected at 7.9% [2] - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 3.23% [2] Dividend History - NI has consistently increased shareholder value through dividends, currently paying a quarterly dividend of 28 cents per share, which annualizes to $1.12 [3] - The current dividend yield stands at 2.70%, outperforming the S&P 500 composite average of 1.07% [3] Capital Investment Focus - NI's capital investment plan anticipates expenditures of $26.4 billion to $28.4 billion for the period 2026-2030 [4] - The focus of this investment includes the development of two 1,300-megawatt natural gas-fired turbines, the addition of 400 megawatts of new battery storage, and upgrades to critical transmission infrastructure [4] - These investments aim to meet rising demand from data centers, enhance system reliability, and improve customer satisfaction [4] Overview of Debt Structure - NI's total debt to capital ratio is 58.37%, which is better than the industry average of 61.13% [5] - The company's capital structure is more efficient due to lower reliance on debt compared to industry peers [5] Solvency Ratio - NI's times interest earned (TIE) ratio at the end of Q3 2025 was 3.0, indicating effective management of long-term debt obligations [6] Share Price Performance - Over the past year, NI shares have increased by 15.3%, although this is below the industry's growth of 21.9% [9]

Core Insights - Southern Company's shares have decreased by 5.9% over the past six months, contrasting with a 9.1% gain in the Zacks Utility-Electric Power industry and a nearly 7.3% rise in the broader utility sector [1] Performance Comparison - Other industry operators like Ameren Corporation, CenterPoint Energy, and Dominion Energy have seen stock gains of 2%, 3.5%, and 4.5% respectively during the same period [2] Factors Driving Performance - Southern Company is experiencing significant large-load growth, securing 7 GW of contracted demand through 2029, with a pipeline exceeding 50 GW, ensuring durable earnings and cash-flow visibility [6] - The company benefits from a supportive regulatory environment in Georgia, Alabama, and Mississippi, with rate stability plans extending until 2029, which enhances operational efficiency and lowers project risk [7] - A $76 billion capital investment plan through 2029 aims to modernize infrastructure and expand capacity, with projects already underway, providing long-term growth potential with low execution risk [9] - The Southeast region's economic growth is driving retail electricity sales, with commercial sales up 3.5% and an increase of 12,000 residential customers in the third quarter [10] Earnings Estimates - The Zacks Consensus Estimate for Southern Company's 2025 earnings per share (EPS) indicates a year-over-year increase of 5.7% [11] - The current consensus estimates for EPS in the upcoming quarters and years show a positive growth trajectory, with a year-over-year growth estimate of 5.68% for the current year [12] Dividend Information - Southern Company has a strong dividend history, currently offering an annual dividend of $2.96 per share, yielding 3.4%, which is competitive compared to peers [13] - The company's dividend payout has increased by about 3% over the last five years, with a payout ratio of 70% of profits, indicating potential for future increases [15] Valuation - Southern Company is trading at a premium valuation of 18.7X forward price-to-earnings ratio, compared to the industry average of 14.8X [16] Summary - Southern Company is positioned for long-term growth due to a surge in large-load demand, a robust capital plan, and supportive regulations, despite its current underperformance relative to peers and a premium valuation [19][20]

Core Insights - Alliant Energy Corporation (LNT) is expanding its clean energy generation assets and enhancing infrastructure to meet increasing demand in its service areas [1] Growth Outlook & Surprise History - The Zacks Consensus Estimate for LNT's 2025 earnings per share (EPS) is $3.22, indicating a year-over-year growth of 5.92% [2] - The revenue estimate for 2025 is $4.23 billion, suggesting a year-over-year improvement of 6.10% [2] - LNT's long-term earnings growth rate is projected at 7.15% [2] - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 13.49% [2] Dividend History - LNT currently pays a quarterly dividend of 50.75 cents per share, leading to an annualized dividend of $2.03 [3] - The current dividend yield stands at 2.93%, outperforming the Zacks S&P 500 composite average of 1.08% [3] Capital Investment Focus - Alliant Energy plans to invest $13.4 billion from 2026 to 2029, with an expected 12% compound annual growth rate (CAGR) for its rate base during this period [4] - The investment strategy focuses on enhancing the electric and gas distribution network while incorporating natural gas and renewable assets into its generation portfolio [4] Demand Drivers - Economic growth in LNT's service areas and an expanding customer base are driving increased demand for utility services [5] - Infrastructure expansion is essential for accommodating this growth [5] Return on Equity - LNT's Return on Equity (ROE) is currently 12.02%, which is higher than the industry average of 9.64% [6] Times Interest Earned Ratio - The times interest earned (TIE) ratio for LNT at the end of Q3 2025 was 2.4, indicating the company's ability to meet long-term debt obligations [7] Share Price Performance - Over the past six months, LNT's shares have increased by 12.7%, although this lags behind the industry's growth of 13.1% [10]

Core Insights - NiSource Inc. (NI) is focused on modernizing its infrastructure and transitioning from coal-based units to clean energy assets, making it a strong investment in the Utility-Electric Power industry [1] Growth Outlook & Surprise History - The Zacks Consensus Estimate for NI's 2025 earnings per share (EPS) is $1.88, indicating a year-over-year growth of 7.43% [2] - The revenue estimate for 2025 is $6.26 billion, suggesting a year-over-year improvement of 14.70% [2] - NI's long-term earnings growth rate is projected at 7.93% [2] - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 3.23% [2] Dividend History - NI has consistently increased shareholder value through dividends, currently paying a quarterly dividend of 28 cents per share, leading to an annualized dividend of $1.12 [3] - The current dividend yield stands at 2.56%, outperforming the S&P 500 composite average of 1.09% [3] Capital Investment Focus - NI's capital investment plan anticipates expenditures between $26.4 billion and $28.4 billion for the period of 2026-2030 [4] - Strategic investments include the development of two 1,300-megawatt natural gas-fired turbines, 400 megawatts of new battery storage, and upgrades to critical transmission infrastructure [5] Debt Structure - NI's total debt to capital ratio is 58.37%, which is better than the industry average of 59.51% [6] - The company's capital structure is more efficient due to lower reliance on debt [6] Solvency Ratio - NI's times interest earned (TIE) ratio at the end of Q3 2025 was 3.0, indicating strong capability to meet long-term debt obligations [7] Share Price Performance - Over the past year, NI's shares have increased by 14.4%, although this lags behind the industry's growth of 16.2% [10]

Core Insights - PG&E Corporation (PCG) is benefiting from systematic investments in infrastructure improvements and clean energy initiatives, enhancing service reliability and positioning itself as a strong investment in the Utility-Electric Power industry [1] Growth Outlook & Surprise History - The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) has increased by 2.6% to 39 cents over the past 60 days [2] - The revenue estimate for 2025 is projected at $26.06 billion, indicating a year-over-year growth of 6.72% [2] - PCG's long-term earnings growth rate is estimated at 15.89%, with an average earnings surprise of 0.5% over the last four quarters [2] Dividend History - PCG has consistently increased shareholder value through dividends, currently paying a quarterly dividend of 2.5 cents per share, leading to an annualized dividend of 10 cents [3] - The current dividend yield stands at 0.64%, which is lower than the Zacks S&P 500 composite average of 1.10% [3] Capital Investment and Clean Energy Plan - The company plans to invest $12.9 billion in 2025 and an additional $73 billion from 2026 to 2030, targeting a 10% earnings growth for 2025 and a long-term annual growth rate of at least 9% during 2026-2030 [4] - PG&E aims to achieve 90% of retail energy sales from renewable and zero-carbon sources by 2035, supported by its investment in battery energy storage [5] Return on Equity - PCG's Return on Equity (ROE) is currently at 11.10%, surpassing the industry average of 9.64%, indicating efficient utilization of shareholders' funds [6] Solvency - The times interest earned (TIE) ratio for PCG at the end of the third quarter of 2025 was 1.8, reflecting the company's ability to meet long-term debt obligations [7] Share Price Performance - Over the past three months, PCG's shares have increased by 4.4%, although this is below the industry's growth of 7.7% [10] Other Stocks to Consider - Other top-ranked stocks in the same industry include Dominion Energy, Inc. (D), Edison International (EIX), and CenterPoint Energy, Inc. (CNP), all carrying a Zacks Rank 2 [11][12]

Core Insights - Evergy, Inc. (EVRG) is expanding its operations in the transmission market through collaborations, strategic acquisitions, and partnerships while aiming for carbon neutrality by 2045 [1] Growth Outlook - The Zacks Consensus Estimate for 2025 earnings per share (EPS) is $4.01, with a slight increase of 0.47% for 2026 EPS to $4.28 over the past 60 days [2] - The revenue estimate for 2025 is $5.95 billion, indicating a year-over-year improvement of 1.80%, while the 2026 revenue estimate is $6.23 billion, implying a growth of 4.59% [2] - The long-term earnings growth rate for EVRG is projected at 5.78% over the next three to five years [2] Capital Return Program - EVRG has been increasing shareholder value through consistent dividend payments, with a current quarterly dividend of 69.5 cents per share, leading to an annualized dividend of $2.78 [3] - The current dividend yield stands at 3.61%, significantly higher than the Zacks S&P 500 composite average of 1.12% [3] Debt Structure - The capital-intensive nature of the Utilities sector necessitates substantial investments for upgrades and expansions, with the Federal Reserve's interest rate reduction benefiting utilities [4] - EVRG's total debt to capital ratio is 55.84%, which is better than the industry average of 59.51% [4] Times Interest Earned Ratio - Evergy's times interest earned (TIE) ratio at the end of Q3 2025 was 2.5, indicating a strong ability to meet long-term debt obligations [5] Share Price Performance - Over the past year, EVRG's shares have increased by 18.8%, outperforming the industry's growth of 15.6% [6]