Exelon Corporation (NASDAQ:EXC) is strategically positioning itself for long-term success through significant investments in strengthening its transmission and distribution infrastructure. This forward-thinking approach is expected to propel the company’s overall performance, making EXC a compelling investment opportunity within the utility sector.
Let’s delve into the key factors that position this company as a robust investment choice at this juncture.
Positive Growth Projections & Performance History
The Zacks Consensus Estimate for EXC’s fourth-quarter 2023 earnings per share (EPS) has surged by 11.8% to 57 cents over the past 60 days. Furthermore, EXC boasts a promising long-term (three- to five-year) earnings growth rate of 6.3%, accompanied by a consistent track record of delivering an average earnings surprise of 1.8% in the last four quarters.
Efficient Utilization of Funds: Return on Equity (ROE)
EXC’s Return on Equity (ROE) stands at an impressive 8.82% in the trailing twelve months, surpassing the industry average of 6.96%. This underscores the company’s effective use of funds, outperforming its peers in the electric power utility industry.
Steady Dividend Growth
Exelon has consistently enhanced shareholder value through regular dividend payments. Currently at 36 cents per share quarterly, this translates to an annualized dividend of $1.44 per share, reflecting a noteworthy 6.7% improvement from the previous year’s reported figure of $1.35. Exelon aims to sustain this positive trend by targeting an annual 6-8% increase in dividends per share through 2026, subject to board approval. With a current dividend yield of 3.7%, EXC surpasses the Zacks S&P 500 Composite’s average of 1.43%.
Strategic Investments in Infrastructure
Demonstrating a commitment to robust infrastructure, EXC is set to invest nearly $31.3 billion from 2023 to 2026 in regulated utility operations. This investment will focus on grid modernization and fortifying infrastructure resilience for the benefit of customers. Allocations include $20.8 billion in electric distribution, $6.7 billion in electric transmission, and $3.9 billion in gas delivery during the specified period. Concurrently, the company targets a sustainable long-term EPS growth of 6-8% annually.
Resilient Price Performance
Over the past year, Exelon’s shares have exhibited resilience with a 0.6% increase, contrasting the industry’s average decline of 11%. This positive performance underscores the company’s ability to navigate challenges within the market.
In conclusion, Exelon Corporation (NASDAQ:EXC) emerges as a strategic addition to your portfolio, offering growth potential, strong dividend prospects, and a commitment to infrastructure development. Consider leveraging the opportunities presented by EXC for a robust and diversified investment strategy.
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