Latest news with #Eversource
CBS News
11 hours ago
- General
- CBS News
Who's responsible for cracked streetlights leaning over a Boston road?
The I-Team is getting the bottom of a potentially dangerous problem in a Boston neighborhood. Ann Marie Ford lives in Dorchester and says she's concerned about the streetlights along Gallivan Boulevard. Many look to be in in disrepair, and she says they could pose a danger. Ann Marie pointed out the cracks, rust and crumbling concrete telling the I-Team, "I was kind of shocked, because we just saw the one and then when we looked up, we saw them all down the median and it's dangerous." "Someone could get killed" Potentially dangerous because the light poles are leaning into the street. We brought in Wentworth Institute of Technology Engineering Professor James Lambrechts who explained the danger. "Someone could get killed," Lambrechts said. Streetlight leaning on Gallivan Blvd. in Boston. CBS Boston Lambrechts says it's clear the poles are leaning towards the highway. "As it leans more, it bends more," Lambrechts said. "Its foundation is going to be overloaded. That's not good." Lambrechts found the poles are not just leaning, but cracking. "These are not good things for the pole to have this problem and it shouldn't be like this," Lambrechts said. Who owns the streetlights? Gallivan Boulevard is a state DOT road. The I-Team asked for the inspection reports for the streetlights. DOT told us DCR owns the road. It does not. State records show Gallivan Boulevard was transferred to DOT in 2009. DOT then said Eversource owns the poles and told us it has notified the utility company about possible safety or maintenance issues. But they could not tell us when the poles were last inspected or whether the repairs or maintenance had been done. "You got to come out and maintain these things every once in a while," Lambrechts said. "They all need to be inspected, evaluated and replaced as necessary." Eversource has received calls about streetlights As for Eversource, it refused to provide the I-Team with any records, but released a statement: "Delivering safe, reliable energy service to our customers is always our top priority, and we are constantly working to maintain and upgrade our local electric distribution system across Massachusetts. With respect to the streetlights on Gallivan Boulevard, our maintenance responsibilities currently include maintenance of the pole, cable and luminaire. We also inspect these streetlights annually for stray voltage, and if we record an elevated voltage reading or other issue on a Gallivan Boulevard streetlight structure, we provide those findings and locations to the commonwealth. Our troubleshooters - who are out in our communities 24/7 - are also constantly evaluating the condition of infrastructure, including streetlights, as part of their daily work. If our crews observe that a pole's condition poses a safety risk to the public, we work as quickly as possible to address that risk with the appropriate repairs, including replacements when needed. It is important to note that there are different considerations for concrete streetlight poles compared to a wooden utility pole, and if a concrete streetlight pole may have a lean, or visible crack, it doesn't necessarily pose a risk to public safety. Gallivan Boulevard is a highly traversed state roadway with motor vehicle accidents that can cause such damage. Our customer call center has received a handful of calls about streetlights on Gallivan Boulevard this year, and any reports made to our call center about streetlight conditions get assigned for additional inspection. The City of Boston and our state agencies also have dedicated account representatives who communicate with those entities on a daily basis, and we have not received any separate recent complaints regarding streetlights on Gallivan Boulevard from state agencies or the city. When we do receive complaints, we have a process in place to coordinate with MassDOT and the City of Boston to quickly address any potential safety or reliability issues. Any decision to make a repair or to replace a pole is prioritized solely by safety and reliability." Problem light poles in Boston Lambrechts says it's their responsibility to maintain the poles. "If it falls over it's not safe," Lambrechts said. The risk of light poles in poor condition falling is real. In September of 2022, a woman was seriously injured when a corroded streetlight fell on the Moakley Bridge in Boston. An I-Team investigation found the city knew about the problem as far back as 2017. WBZ also uncovered a state report from months earlier showing the poles required immediate repair, but nothing was done. After the incident the city removed nearly two dozen dangerous poles. As for the streetlights on Gallivan Boulevard, Lambrechts says maybe there is a protocol to change these out, but if not, he says he would not drive on the roadway in a storm. Just weeks ago, DOT started a new program requiring inspections and the keeping of records for structures along their roadways, regardless of who owns them.
Yahoo
a day ago
- Business
- Yahoo
Eversource on the Brink: Strong Q1, But Thicket of Regulatory Risk
As I explored the electric utilities industry, I was surprised to find that it comprises nearly 3,000 organizations serving more than 140 million consumers. However, my attention kept going back to one name time and time again and that is Eversource Energy (ES:Financial). The company is pretty stable in an industry that is usually torn between policy changes, infrastructure needs, and investor requirements. It has demonstrated the capacity to evolve successfully and has reported steady performance without losing track of its regulated operations. It appears to be refining its long-term strategy instead of losing its way even as it deals with the regulatory risks and issues associated with its offshore wind exit. It remains focused on stability, operational discipline and shareholder value. These traits seem all too unfamiliar in the current marketplace. Meanwhile, its Q1 earnings reinstated this stability, and the current price and valuation action indicate a meaningful upside over time, although gurus continue to be split in their opinions. Warning! GuruFocus has detected 10 Warning Signs with ES. While no utility is risk-free, the combination of strength and transparency makes Eversource a cornerstone for stability in the industry. Eversource Energy is a large utility company in America and has a market capitalization of approximately $24 billion. It was established in 1927 and is a major provider of essential services in the Northeast. Moreover, Eversource has its operations running in a number of segments such as electric distribution, gas distribution, electric transmission and water services. It has approximately 4.4 million customers today and the majority of them (approximately 3.3 million) are users of electric utilities. The advantage of Eversource with the business model of a regulated utility is the stability of demand and guaranteed returns. After all, it provides services that individuals simply cannot do without in modern life. Eversource has had an excellent Q1 2025, as its revenue increased, earnings remained steady, and its business performed well in the majority of areas despite increased expenditure. So, let us have a closer look and analyze what is behind the numbers. Higher revenue and steady margins: In Q1 2025, the operating revenues of the company increased 24% to $4.12 billion compared to $3.33 billion a year ago. This stellar expansion was pushed by controlled rate increases, ongoing infrastructure investments as well as seasonal demand that is characteristic of colder conditions. Notably, all the major units of the company's business added more in this quarter, which helped in an overall increase in revenue. This revenue growth was however accompanied by an increase in expenses. The total operating costs rose 27.4% to $3.19 billion compared to $2.49 billion, indicating the capital-intensive business nature of Eversource. Among these costs, power and fuel were the biggest purchases, accounting for more than $1.34 billion, Meanwhile, depreciation and amortization charges exceeded $835 million or above 20% YOY. Such raises are due to the continuing investments of Eversource in the restructuring of power grids and infrastructure which obviously increases the asset base yet also burdens short-term margins. Nevertheless, operating income increased to $926 million against $846 million, and net income available to common shareholders clocked in at $550.8 million, more than Q1 2024's $521.8 million. The diluted EPS was reported at $1.50 on a per-share basis, which is a little higher than last year's $1.49. This was however capped by an increase in the number of shares as a result of equity issued under ATM programs and DRIPs of the company. Q1 performance by segment: On a closer examination of each of the segments, the highest earnings growth was seen in the natural gas distribution business. It gave out $218.4 million net income compared to $190.6 million last year, which is an increase of nearly 15%. This was equivalent to an EPS of $0.60 against $0.54 in the previous year. Favorable weather, an increase in rate base and probable improvement in efficiency contributed to the performance, particularly in Massachusetts and Connecticut where regulatory structures permit allowed recovery in a short time. Electric Transmission also exhibited good improvement as the earnings increased by $22.7 million to $199.4 million. That is an EPS contribution of $0.54, compared to $0.50. This segment is still enjoying huge investments in infrastructure and comparatively high allowed returns. The transmission line expansion that Eversource has done to meet its clean energy objectives in its service territories is paying off big time. The Electric Distribution contributed to net income by $188.4 million, which is an increase of $20.3 million compared to Q1 2024. The EPS in this segment increased to $0.51 against $0.48. The gains were helped by the approved rate increases in a number of regions, controlled growth in dollar usage by customers, and tight cost control. Not every segment did very well, though. The water distribution business comprising Aquarion is currently in the process of being sold and recorded a $1.8 million decline in earnings, reducing its quarterly total to $3.6 million. The EPS effect was negligible at a value of $0.01. Still, the decrease means less attention by the management as the divestiture progresses. More importantly, the parent and other segment' also incurred a deeper loss of $59 million, as opposed to $19 million last year. This pulled down EPS by $0.16 as compared to $0.04 in Q1 2024. The elevated loss is probably associated with more expenses at the holding company level such as financing expenses or other overheads. With Eversource investing a lot of money and relying on its balance sheet, controlling these expenses will also be a good way to save margins. Regulatory support and investment strategy strengthen long-term outlook: Eversource is regulated in a favorable environment, where it has already received a number of rate cases, and new ones are being processed. To illustrate, in Massachusetts, electric and gas subsidiaries will obtain a combined amount of rate increases up to November 2025, and it will be equal to $139 million. In Connecticut, an impending adjustment, including a 6% reduction on residential electric bills effective May 2025, makes the balancing of investor returns and customer relief a tightrope act on the part of Eversource. In the future, Eversource restated its long-term goal of 5%-7% annual EPS growth, with the help of increasing investments and regulatory certainty. The company anticipates an increase in its regulated rate base to $41.9 billion in 2029, up by $26.4 billion in 2023, with transmission and electric distribution expenditures leading the pack. Although near-term earnings per share increases could be small, this base growth offers a good foundation for future growth. In sum, Eversource is doing well despite the fact that it has to address an increase in amortization and holding company losses. Eversource is a solid dividend payer without any doubt. It provides a forward dividend yield of 4.6% that is not only comfortably above its own four-year average of 3.75% but also comes out as a notable figure when compared with the majority of its peers. The nearest competitor is Fortis (FTS:Financial) with a yield of 3.79%. Regardless, Eversource still has the upper hand when it comes to yield and growth consistency. Source: Dividends - ES vs. peers (Seeking Alpha) In addition to the yield, Eversource's dividend growth is also on a good momentum. It has produced a 3-year and 5-year CAGR of 5.78% and 5.89% respectively. Such numbers indicate a stable and reliable income trend. Once again, the next closest competitor is Fortis, with respective growth rates of 1.72% and 4.52%. The most significant thing about the company is the fact that it has witnessed 24 years of consecutive dividend growth. Comparatively, the longest dividend growth history in the group is only 9 years with Fortis and most other peers are less than 5 years. Moreover, Eversource has a dividend payout ratio of 63.13%, which is rather sustainable in the industry of utilities, given the stability of its growth and well-balanced yield. Investment-wise, the company is continuing with a capital plan of $24.2 billion up to 2029. Meanwhile, transmission projects are expected to cost almost half of this amount. Massachusetts remains a major figure in this development. In order to finance these projects and maintain a favorable credit rating, Eversource issued $990 million in equity in 2024 and intends to issue $1.2 billion by 2029. Its funds-from-operations to debt ratio is also well above downgrade levels and this is why it has good investment-grade credit ratings by both Moody's and S&P. Therefore, although Fortis provides a certain competition, Eversource is obviously ahead in terms of yielding power, relatively stable growth, and long-term reliability, which is a rare combination of factors. Eversource Energy appears to be relatively cheap at present and it is not a superficial assumption. Looking at market multiples or going long-term with cash flows and dividends, the figures indicate that the stock is highly undervalued. Source: ES Valuation Metrics (Author created based on data) So, we can begin with the basics. The forward P/E ratio of ES is only 13.8x. That is already a very respectable 22% discount on the sector median of 17.7x. It becomes even more interesting when viewed against the company's five-year average of 18.4x. It means that ES is currently being priced in the market below its historical values, in spite of the fact that the business fundamentals have not changed. Actually, they have become better as the company continues to invest in clean energy and grid modernization. Source: Valuation Metrics - ES vs. peers (Author generated based on data) Such a gap is not normal for a regulated utility with predictable cash flows. Fortis (19.2x), PPL (18.7x) and FirstEnergy (16.1x) are all trading at higher multiples. Although some of these premiums may be explained by geographic or financial factors, the discount that Eversource gives is a bit too much, given its apparent regulated growth pipeline. Looking further, the market looks a little too cautious even on a top-line basis. ES is currently trading at 4.22x EV/Sales, nearly fair to the sector, but 8% below its 5-year average. That is a considerable discount, considering that utility revenues are usually steady and predictable. Not only does EV/EBITDA show ES at 11.76x, but it is right in the middle of its peers, FirstEnergy (10.84) and Fortis (12.27) yet, 10% undervalued than its average. That suggests there is room for upside if the mood of investors changes even marginally. Next, there is the price-to-book ratio which is usually a forgotten one but still applies in the case of asset-intensive industries such as utilities. ES at 1.57x is trading currently at 15% below the industry average and 12% below its historical level. Simply put, the valuation of Eversource indicates a disconnect in the market and provides a solid case for re-rating. The shares of Eversource have found solid support at the price of between $56 and $58 by the beginning of 2025. The price in recent days has been stabilizing and slightly recovering as it has crawled up to the range of $61-$63 once again. This is a type of recovery close to a historically good support level which is an indication that the selling pressure could be abating. There is close resistance at the level of approximately $65, and the long-term ceiling is at approximately $70. The price action at present is at a consolidation stage. In addition, analysts are somewhat positive. Among the 20 brokerage firms, the consensus rating is 2.5, which represents an Outperform' sentiment. This midway bullish tendency is supported by a good distribution of opinions including 4 Buy, 6 Outperform, and 8 Hold ratings. It suggests an increasing confidence, but not too much excitement. With the more extended forecast range, the high end of the target at $85 implies a possible upside of almost 29% and the low end of the target at $47 seems to be getting less and less plausible in light of the technical support and strengthening price action. The fact that the market is currently going through a consolidation period and that analyst confidence is back means that the realistic goal is the $72-$75 range. With such a technical foundation and solid fundamentals of the company, it is likely to see recovery to $72-75 in the next 12 months. It would mean an 18%-22% upward re-rating from current levels and indicate a re-rating of the company to sector-average valuation multiples. Altogether, Eversource Energy seems to be in a good place to recover gradually. Eversource Energy has had a significant amount of guru activity over the last 12 months. The gurus have had divergent views on the stock. Q1 2025 saw a massive amount of selling by Paul Tudor Jones (Trades, Portfolio) (Trades, Portfolio) and Baillie Gifford (Trades, Portfolio) (Trades, Portfolio) who sold their positions by more than 93.3% and 8.14% respectively. These notable declines were in the same trend as Q4 2024 when both funds had already cut their holdings. That said, Ken Fisher (Trades, Portfolio) committed a rather small addition of 5.37% to his holding and Renaissance Technologies (Trades, Portfolio) started a fresh buy in the same quarter. However, what is most notable is that Joel Greenblatt (Trades, Portfolio) strongly increased his position by a whopping 195%. Source: Guru trades (Guru Focus) The interesting point is that the stock has steadily increased above the average trading price irrespective of whether gurus were buyers or sellers. In all of the mentioned cases, the ES is currently trading at approximately a 10.44% premium to the average entry or exit price. That means the gurus who got out might have done so at the time they were gaining short-term profits. Considering the volume patterns, the selling pressure was intense at the beginning of 2025, but with the fresh purchases of significant quantity, including 179,380 shares bought by Renaissance Technologies (Trades, Portfolio), it seems that the stock still enjoys institutional trust in spite of the split emotions. As the price has now moved into the upper $63.80s, well above any of the historical trading ranges, ES seems to be weathering the rotation fairly well. Eversource faces certain risks that could deteriorate its re-rating. Even though Eversource is based in states that have had constructive oversight in the past, the rising political oversight, particularly in Connecticut, may result in stricter return provisions or slow cost recovery. The most current and seen example is the Eversource multi-year rate increase plan proposal of $3.2 billion in Connecticut, filed in early 2024. As the company claims the rises are necessary to recoup infrastructure investments and ensure reliability, the Public Utilities Regulatory Authority (PURA) is on the contrary cautious. It has voiced fears of affordability by the consumer and indicated a possible reduction in the suggested changes. If the decision made by PURA at the end of the process ends up being lower than expected on the approved rates, then there would be a direct effect on the near-term earnings and it would cause a slackening of the rate base growth which is the basis of the 5-7% EPS growth rates out in the company. The result will probably influence how investors feel about Eversource, and whether it will get the re-rating its fundamentals appear to justify. Furthermore, among the interesting dynamics is the fact that in April 2024, S&P downgraded the credit rating of Eversource to BBB+ from A- because the company had excessive leverage and huge capital demands. Despite staying within the investment-grade rating, the downgrade has taken Eversource near the tail end of investment-grade credit. This could raise the cost of borrowing in the future and lower financial flexibility, which is vital considering the company intends to spend more than 24.2 billion on capital in the coming years. It could also quash investor appetite for a valuation re-rating as some funds will not buy lower-tier credit, or need a significantly elevated yield to cover any perceived risk. Additionally, the balance sheet or financial flexibility could be undermined by delays in monetizing the proceeds, proceeds that fall below expectations or unexpected tax effects. Last but not least, sales of assets, rising depreciation and interest expense could put pressure on short-term results, slowing the appreciation of the company's fundamentals by the market. The Q1 2025 performance of Eversource demonstrates the company as a rate-regulated company with a solid long-term plan. It still aims at 5-7% growth in EPS, which will be backed by a $24.2 billion capex program, an escalating rate base and an excellent dividend track record. Meanwhile, investors should keep in mind the main overhangs that still exist, such as the regulatory resistance in Connecticut, high capex requirements, and the recent S&P downgrade to BBB+, which may lead to an increase in borrowing costs and limit the sharp recovery of valuation. Even so, given the stock is trading at a pronounced discount to its history and to its peers on P/E, EV/EBITDA and price-to-book ratios, the market has already discounted a good deal of near-term uncertainty. It is also notable that the guru investors appear divided with some reducing holdings in the face of macro headwinds and others doing the reverse pointing out a question about timing and long-term value. The present consolidation at $61-$63 is a very good entry point for a long-term investor to begin accumulating the stock. Eversource also stands a good chance of being gradually acquired at present valuation given its upside potential. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Eversource on the Brink: Strong Q1, But Thicket of Regulatory Risk
As I explored the electric utilities industry, I was surprised to find that it comprises nearly 3,000 organizations serving more than 140 million consumers. However, my attention kept going back to one name time and time again and that is Eversource Energy (ES:Financial). The company is pretty stable in an industry that is usually torn between policy changes, infrastructure needs, and investor requirements. It has demonstrated the capacity to evolve successfully and has reported steady performance without losing track of its regulated operations. It appears to be refining its long-term strategy instead of losing its way even as it deals with the regulatory risks and issues associated with its offshore wind exit. It remains focused on stability, operational discipline and shareholder value. These traits seem all too unfamiliar in the current marketplace. Meanwhile, its Q1 earnings reinstated this stability, and the current price and valuation action indicate a meaningful upside over time, although gurus continue to be split in their opinions. Warning! GuruFocus has detected 10 Warning Signs with ES. While no utility is risk-free, the combination of strength and transparency makes Eversource a cornerstone for stability in the industry. Eversource Energy is a large utility company in America and has a market capitalization of approximately $24 billion. It was established in 1927 and is a major provider of essential services in the Northeast. Moreover, Eversource has its operations running in a number of segments such as electric distribution, gas distribution, electric transmission and water services. It has approximately 4.4 million customers today and the majority of them (approximately 3.3 million) are users of electric utilities. The advantage of Eversource with the business model of a regulated utility is the stability of demand and guaranteed returns. After all, it provides services that individuals simply cannot do without in modern life. Eversource has had an excellent Q1 2025, as its revenue increased, earnings remained steady, and its business performed well in the majority of areas despite increased expenditure. So, let us have a closer look and analyze what is behind the numbers. Higher revenue and steady margins: In Q1 2025, the operating revenues of the company increased 24% to $4.12 billion compared to $3.33 billion a year ago. This stellar expansion was pushed by controlled rate increases, ongoing infrastructure investments as well as seasonal demand that is characteristic of colder conditions. Notably, all the major units of the company's business added more in this quarter, which helped in an overall increase in revenue. This revenue growth was however accompanied by an increase in expenses. The total operating costs rose 27.4% to $3.19 billion compared to $2.49 billion, indicating the capital-intensive business nature of Eversource. Among these costs, power and fuel were the biggest purchases, accounting for more than $1.34 billion, Meanwhile, depreciation and amortization charges exceeded $835 million or above 20% YOY. Such raises are due to the continuing investments of Eversource in the restructuring of power grids and infrastructure which obviously increases the asset base yet also burdens short-term margins. Nevertheless, operating income increased to $926 million against $846 million, and net income available to common shareholders clocked in at $550.8 million, more than Q1 2024's $521.8 million. The diluted EPS was reported at $1.50 on a per-share basis, which is a little higher than last year's $1.49. This was however capped by an increase in the number of shares as a result of equity issued under ATM programs and DRIPs of the company. Q1 performance by segment: On a closer examination of each of the segments, the highest earnings growth was seen in the natural gas distribution business. It gave out $218.4 million net income compared to $190.6 million last year, which is an increase of nearly 15%. This was equivalent to an EPS of $0.60 against $0.54 in the previous year. Favorable weather, an increase in rate base and probable improvement in efficiency contributed to the performance, particularly in Massachusetts and Connecticut where regulatory structures permit allowed recovery in a short time. Electric Transmission also exhibited good improvement as the earnings increased by $22.7 million to $199.4 million. That is an EPS contribution of $0.54, compared to $0.50. This segment is still enjoying huge investments in infrastructure and comparatively high allowed returns. The transmission line expansion that Eversource has done to meet its clean energy objectives in its service territories is paying off big time. The Electric Distribution contributed to net income by $188.4 million, which is an increase of $20.3 million compared to Q1 2024. The EPS in this segment increased to $0.51 against $0.48. The gains were helped by the approved rate increases in a number of regions, controlled growth in dollar usage by customers, and tight cost control. Not every segment did very well, though. The water distribution business comprising Aquarion is currently in the process of being sold and recorded a $1.8 million decline in earnings, reducing its quarterly total to $3.6 million. The EPS effect was negligible at a value of $0.01. Still, the decrease means less attention by the management as the divestiture progresses. More importantly, the parent and other segment' also incurred a deeper loss of $59 million, as opposed to $19 million last year. This pulled down EPS by $0.16 as compared to $0.04 in Q1 2024. The elevated loss is probably associated with more expenses at the holding company level such as financing expenses or other overheads. With Eversource investing a lot of money and relying on its balance sheet, controlling these expenses will also be a good way to save margins. Regulatory support and investment strategy strengthen long-term outlook: Eversource is regulated in a favorable environment, where it has already received a number of rate cases, and new ones are being processed. To illustrate, in Massachusetts, electric and gas subsidiaries will obtain a combined amount of rate increases up to November 2025, and it will be equal to $139 million. In Connecticut, an impending adjustment, including a 6% reduction on residential electric bills effective May 2025, makes the balancing of investor returns and customer relief a tightrope act on the part of Eversource. In the future, Eversource restated its long-term goal of 5%-7% annual EPS growth, with the help of increasing investments and regulatory certainty. The company anticipates an increase in its regulated rate base to $41.9 billion in 2029, up by $26.4 billion in 2023, with transmission and electric distribution expenditures leading the pack. Although near-term earnings per share increases could be small, this base growth offers a good foundation for future growth. In sum, Eversource is doing well despite the fact that it has to address an increase in amortization and holding company losses. Eversource is a solid dividend payer without any doubt. It provides a forward dividend yield of 4.6% that is not only comfortably above its own four-year average of 3.75% but also comes out as a notable figure when compared with the majority of its peers. The nearest competitor is Fortis (FTS:Financial) with a yield of 3.79%. Regardless, Eversource still has the upper hand when it comes to yield and growth consistency. Source: Dividends - ES vs. peers (Seeking Alpha) In addition to the yield, Eversource's dividend growth is also on a good momentum. It has produced a 3-year and 5-year CAGR of 5.78% and 5.89% respectively. Such numbers indicate a stable and reliable income trend. Once again, the next closest competitor is Fortis, with respective growth rates of 1.72% and 4.52%. The most significant thing about the company is the fact that it has witnessed 24 years of consecutive dividend growth. Comparatively, the longest dividend growth history in the group is only 9 years with Fortis and most other peers are less than 5 years. Moreover, Eversource has a dividend payout ratio of 63.13%, which is rather sustainable in the industry of utilities, given the stability of its growth and well-balanced yield. Investment-wise, the company is continuing with a capital plan of $24.2 billion up to 2029. Meanwhile, transmission projects are expected to cost almost half of this amount. Massachusetts remains a major figure in this development. In order to finance these projects and maintain a favorable credit rating, Eversource issued $990 million in equity in 2024 and intends to issue $1.2 billion by 2029. Its funds-from-operations to debt ratio is also well above downgrade levels and this is why it has good investment-grade credit ratings by both Moody's and S&P. Therefore, although Fortis provides a certain competition, Eversource is obviously ahead in terms of yielding power, relatively stable growth, and long-term reliability, which is a rare combination of factors. Eversource Energy appears to be relatively cheap at present and it is not a superficial assumption. Looking at market multiples or going long-term with cash flows and dividends, the figures indicate that the stock is highly undervalued. Source: ES Valuation Metrics (Author created based on data) So, we can begin with the basics. The forward P/E ratio of ES is only 13.8x. That is already a very respectable 22% discount on the sector median of 17.7x. It becomes even more interesting when viewed against the company's five-year average of 18.4x. It means that ES is currently being priced in the market below its historical values, in spite of the fact that the business fundamentals have not changed. Actually, they have become better as the company continues to invest in clean energy and grid modernization. Source: Valuation Metrics - ES vs. peers (Author generated based on data) Such a gap is not normal for a regulated utility with predictable cash flows. Fortis (19.2x), PPL (18.7x) and FirstEnergy (16.1x) are all trading at higher multiples. Although some of these premiums may be explained by geographic or financial factors, the discount that Eversource gives is a bit too much, given its apparent regulated growth pipeline. Looking further, the market looks a little too cautious even on a top-line basis. ES is currently trading at 4.22x EV/Sales, nearly fair to the sector, but 8% below its 5-year average. That is a considerable discount, considering that utility revenues are usually steady and predictable. Not only does EV/EBITDA show ES at 11.76x, but it is right in the middle of its peers, FirstEnergy (10.84) and Fortis (12.27) yet, 10% undervalued than its average. That suggests there is room for upside if the mood of investors changes even marginally. Next, there is the price-to-book ratio which is usually a forgotten one but still applies in the case of asset-intensive industries such as utilities. ES at 1.57x is trading currently at 15% below the industry average and 12% below its historical level. Simply put, the valuation of Eversource indicates a disconnect in the market and provides a solid case for re-rating. The shares of Eversource have found solid support at the price of between $56 and $58 by the beginning of 2025. The price in recent days has been stabilizing and slightly recovering as it has crawled up to the range of $61-$63 once again. This is a type of recovery close to a historically good support level which is an indication that the selling pressure could be abating. There is close resistance at the level of approximately $65, and the long-term ceiling is at approximately $70. The price action at present is at a consolidation stage. In addition, analysts are somewhat positive. Among the 20 brokerage firms, the consensus rating is 2.5, which represents an Outperform' sentiment. This midway bullish tendency is supported by a good distribution of opinions including 4 Buy, 6 Outperform, and 8 Hold ratings. It suggests an increasing confidence, but not too much excitement. With the more extended forecast range, the high end of the target at $85 implies a possible upside of almost 29% and the low end of the target at $47 seems to be getting less and less plausible in light of the technical support and strengthening price action. The fact that the market is currently going through a consolidation period and that analyst confidence is back means that the realistic goal is the $72-$75 range. With such a technical foundation and solid fundamentals of the company, it is likely to see recovery to $72-75 in the next 12 months. It would mean an 18%-22% upward re-rating from current levels and indicate a re-rating of the company to sector-average valuation multiples. Altogether, Eversource Energy seems to be in a good place to recover gradually. Eversource Energy has had a significant amount of guru activity over the last 12 months. The gurus have had divergent views on the stock. Q1 2025 saw a massive amount of selling by Paul Tudor Jones (Trades, Portfolio) (Trades, Portfolio) and Baillie Gifford (Trades, Portfolio) (Trades, Portfolio) who sold their positions by more than 93.3% and 8.14% respectively. These notable declines were in the same trend as Q4 2024 when both funds had already cut their holdings. That said, Ken Fisher (Trades, Portfolio) committed a rather small addition of 5.37% to his holding and Renaissance Technologies (Trades, Portfolio) started a fresh buy in the same quarter. However, what is most notable is that Joel Greenblatt (Trades, Portfolio) strongly increased his position by a whopping 195%. Source: Guru trades (Guru Focus) The interesting point is that the stock has steadily increased above the average trading price irrespective of whether gurus were buyers or sellers. In all of the mentioned cases, the ES is currently trading at approximately a 10.44% premium to the average entry or exit price. That means the gurus who got out might have done so at the time they were gaining short-term profits. Considering the volume patterns, the selling pressure was intense at the beginning of 2025, but with the fresh purchases of significant quantity, including 179,380 shares bought by Renaissance Technologies (Trades, Portfolio), it seems that the stock still enjoys institutional trust in spite of the split emotions. As the price has now moved into the upper $63.80s, well above any of the historical trading ranges, ES seems to be weathering the rotation fairly well. Eversource faces certain risks that could deteriorate its re-rating. Even though Eversource is based in states that have had constructive oversight in the past, the rising political oversight, particularly in Connecticut, may result in stricter return provisions or slow cost recovery. The most current and seen example is the Eversource multi-year rate increase plan proposal of $3.2 billion in Connecticut, filed in early 2024. As the company claims the rises are necessary to recoup infrastructure investments and ensure reliability, the Public Utilities Regulatory Authority (PURA) is on the contrary cautious. It has voiced fears of affordability by the consumer and indicated a possible reduction in the suggested changes. If the decision made by PURA at the end of the process ends up being lower than expected on the approved rates, then there would be a direct effect on the near-term earnings and it would cause a slackening of the rate base growth which is the basis of the 5-7% EPS growth rates out in the company. The result will probably influence how investors feel about Eversource, and whether it will get the re-rating its fundamentals appear to justify. Furthermore, among the interesting dynamics is the fact that in April 2024, S&P downgraded the credit rating of Eversource to BBB+ from A- because the company had excessive leverage and huge capital demands. Despite staying within the investment-grade rating, the downgrade has taken Eversource near the tail end of investment-grade credit. This could raise the cost of borrowing in the future and lower financial flexibility, which is vital considering the company intends to spend more than 24.2 billion on capital in the coming years. It could also quash investor appetite for a valuation re-rating as some funds will not buy lower-tier credit, or need a significantly elevated yield to cover any perceived risk. Additionally, the balance sheet or financial flexibility could be undermined by delays in monetizing the proceeds, proceeds that fall below expectations or unexpected tax effects. Last but not least, sales of assets, rising depreciation and interest expense could put pressure on short-term results, slowing the appreciation of the company's fundamentals by the market. The Q1 2025 performance of Eversource demonstrates the company as a rate-regulated company with a solid long-term plan. It still aims at 5-7% growth in EPS, which will be backed by a $24.2 billion capex program, an escalating rate base and an excellent dividend track record. Meanwhile, investors should keep in mind the main overhangs that still exist, such as the regulatory resistance in Connecticut, high capex requirements, and the recent S&P downgrade to BBB+, which may lead to an increase in borrowing costs and limit the sharp recovery of valuation. Even so, given the stock is trading at a pronounced discount to its history and to its peers on P/E, EV/EBITDA and price-to-book ratios, the market has already discounted a good deal of near-term uncertainty. It is also notable that the guru investors appear divided with some reducing holdings in the face of macro headwinds and others doing the reverse pointing out a question about timing and long-term value. The present consolidation at $61-$63 is a very good entry point for a long-term investor to begin accumulating the stock. Eversource also stands a good chance of being gradually acquired at present valuation given its upside potential. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Buy These 3 High-Yield Dividend Stocks for Portfolio Protection Amid Israel-Iran Conflict
Conflict between Israel and Iran has put global investors on edge as markets have reacted with heightened caution. Investors searching for stability are increasingly turning their attention to high-yield dividend stocks. These companies offering high yields and reliable dividend payments are standing out, especially as growth stocks struggle and volatility rises. Seeking Passive Income? This Dividend Stock Yields 9.6%. 3 Dirt-Cheap Dividend Aristocrats About to Explode Higher Buy These 3 High-Yield Dividend Stocks for Portfolio Protection Amid Israel-Iran Conflict Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Could these three high-yield dividend stocks offer a rare combination of protection and income that your portfolio needs right now? Let's find out. VICI Properties (VICI) is a leading real estate investment trust (REIT) specializing in gaming, hospitality, and experiential real estate assets with a market capitalization of $34.7 billion. The company's dividend is a core attraction, currently offering an annualized payout of $1.73 per share, a robust 5.3% yield, and a sustainable payout ratio of 60.9%. VICI's shares have delivered year-to-date gains of 12.7% and 52-week returns of 15.8%. The company's first-quarter 2025 results, released April 30, 2025, highlighted revenue of $984.2 million, up 3.4% year-over-year, and net income attributable to common stockholders of $543.6 million, or $0.51 per share. Adjusted funds from operations (AFFO) rose 5.6% to $616 million, or $0.58 per share, and the company ended the quarter with $334.3 million in cash and $624.6 million in estimated forward sale equity proceeds. For full-year 2025, management raised AFFO guidance to between $2.47 billion and $2.50 billion, or $2.33–$2.36 per diluted share. Analysts are calling for moderate earnings per share growth to $0.59 for the current quarter. Analyst consensus is resoundingly positive, with the 22 surveyed analysts rating VICI a consensus 'Strong Buy' and giving it an average price target of $36.13. This optimism is rooted in VICI's defensive business model, strong cash flows, and strategic expansion. Eversource Energy (ES) delivers electricity and natural gas (NGN25) to customers across New England, operating as a regulated utility. The company supports a generous dividend, currently yielding 4.7% with an annual payout of $3.01 per share. Eversource's share price is just below $64, reflecting year-to-date gains of 11.3% and a 52-week return of 10.2%. Eversource's first-quarter 2025 results revealed GAAP earnings of $1.50 per share, a slight increase from $1.49 in the previous year. The transmission, electric distribution, and natural gas segments all reported improved earnings due to higher investments and effective rate mechanisms. In contrast, the parent segment experienced increased losses due to higher interest expenses. ES's $2.4 billion sale of Aquarion, which includes $1.6 billion in cash and $800 million in cleared debt, sharpens its focus on core electric and gas operations and strengthens its balance sheet. The company's capital investment plan of $24.2 billion for 2025–2029, primarily aimed at distribution and transmission, supports steady, rate-regulated growth. The company reaffirmed 2025 EPS guidance of $4.67–$4.82 per share and a long-term growth rate of 5%–7% through 2029. Analyst sentiment remains generally positive, with a 'Moderate Buy' rating from 19 analysts and an average price target of $68.56. Pinnacle West Capital (PNW) is the parent company of Arizona Public Service (APS), supplying electricity to over 1.4 million customers across Arizona. The company's dividend is both reliable and growing, with a recent quarterly payout of $0.895 per share, translating to an annual yield of roughly 4% and a payout ratio of 70.9%. Pinnacle's shares are priced just above $90, reflecting a year-to-date gain of 6.5% and a 52-week return of 19.3%. Pinnacle West's first-quarter 2025 results, released May 1, 2025, revealed a net loss attributable to common shareholders of $4.6 million, or $0.04 per diluted share, missing analyst expectations by $0.06, but revenue surpassed forecasts at $1.03 billion, up 8.4% year-over-year. CEO Ted Geisler noted, 'Financial results in the first quarter were in line with our expectations, especially given the power plant overhauls and maintenance work built into our budget to ensure reliability for the summer months,' while highlighting robust customer and electricity sales growth as Arizona's economy continues to expand. APS retail customers grew 2.3% and retail sales increased 2.1% quarter-over-quarter, reinforcing the region's strong economic momentum. The company's APS sector is nearing completion of scheduled maintenance and refueling at the Palo Verde Generating Station Unit 1, ensuring grid reliability and supporting long-term operational efficiency. For 2025, Pinnacle West maintains consolidated earnings guidance of $4.40 to $4.60 per diluted share. Analyst consensus remains positive with a 'Moderate Buy' rating from 15 analysts and an average price target of $97.71. With geopolitical tensions high, VICI, ES, and PNW are solid choices for portfolio protection and steady income. Each company's reliable dividends and defensive business models make them especially attractive when markets get shaky. Looking ahead, shares in these names are likely to hold their ground or even post modest gains, as investors continue to favor stability over risk. While nothing's ever guaranteed, the focus on infrastructure, real estate, and essential services means these stocks should weather volatility better than most. On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Climate
- Yahoo
Dangerous heat dome brings life-threatening temperatures to nearly 170 million people across 28 states
Millions of people across the eastern United States are experiencing the 'first significant heat wave this season' over the next several days as record-high temperatures set in, according to the National Weather Service. Nearly 170 million people across 28 states are under various heat alerts, the federal agency says. 'High temperatures in the 90s to 100s and lows in the 70s to low 80s will break numerous records over the next several days,' according to a Monday update from the NWS. In New York, Gov. Kathy Hochul has declared a state of emergency in 32 counties as the state faces a one-two punch of extreme heat and severe weather. 'Extremely dangerous heat' will persist from the Midwest to the East Coast this week at least through Wednesday, according to the NWS. On Monday, extreme heat warnings and advisories will expand from the Midwest into the mid-Atlantic. 'This level of HeatRisk is known for being rare and/or long duration with little to no overnight relief, and affects anyone without effective cooling and/or adequate hydration,' the NWS said. Areas with dense urban centers like Columbus, Ohio; Washington, D.C.; and Philadelphia will feel especially significant heat impacts. You can check to see if your area is under a heat warning or advisory here. Early Monday afternoon, nearly 10,000 customers were experiencing power outages in the New York City borough of Queens along the border with Long Island due to the extreme heat. Around 1 p.m. ET, there were just over 7,500 customers without power. In neighboring Connecticut, hundreds of power outages were reported by the state's largest utility provider, Eversource. Around 1 p.m. ET, the outages were at around 450. Meteorologists say the oppressive heat is due to a 'heat dome.' It happens when heat and humidity are trapped by an area of high pressure that's in the upper atmosphere. Dangerously high temperatures and poor air quality are a result when the heat dome is stationary and the air is extremely hot and stagnant. A heat wave happens when there's a period of unusually hot weather for more than two days. Heat is one of the deadliest forms of extreme weather in the U.S. There has been an average of 800 heat-related deaths per year in the country since 1999, according to a 2023 study. The NWS recommends that people affected by the extreme heat wear lightweight and loose-fitting clothing. It's important to monitor symptoms of heat exhaustion or heatstroke, which can include muscle cramps, unusually heavy sweating, shortness of breath, dizziness, headaches, weakness or nausea, according to the Centers for Disease Control and Prevention. If symptoms continue after you've moved to a cool place and have hydrated, seek medical care. Read more from Yahoo News: How extreme heat affects the body — and who's most at risk
