Westar Energy Hits a New 52-Week High - Analyst Blog

On April 9, 2014, the shares of Westar Energy Inc. WR hit a 52-week high of $35.50 in intraday trading to finally close a trifle lower at $35.14. This comes to a gain of 10.8% over the past one-year period. The company has been performing well, registering positive earnings surprises in the last four quarters, with an average beat of 17.45%.

Westar Energy's strong performance is attributed to residential and commercial sales growth in its service territories. Improvement in the Kansas economy and a lower unemployment rate in the state compared to the national average helped in demand creation. The company expects to register 50–100 basis point sales growth from smaller customers and 1% growth in sales from larger industrial customers in 2014.

To further strengthen its supply and transmission network, Westar Energy plans to invest nearly $2.1 billion in the 2014 to 2016 time period. This will allow Westar to complete the ongoing projects on time and serve its customers more efficiently and effectively.

Westar Energy is focused on generating electricity from environmentally friendly sources. Over the last decade the company added predominantly natural gas and wind based power generation assets. This move will lessen regulatory glare and allow the company to meet the Kansas Renewable Energy Standard.

Westar Energy reported earnings per share of $2.27 in 2013. The company projected earnings in the range of $2.25 to $2.40 per share for 2014 taking into consideration higher expected retail sales.

The Zacks Consensus Estimate for 2014 inched up 1% over the last 60 days to $2.33 per share. This reflects a year-over-year estimated increase of 1.53%. The consensus estimate for the first quarter has jumped 29.4% in the last 60 days to 44 cents, reflecting a year-over-year projected gain of 10.8%.

Recently, the company increased its quarterly dividend by 3% to 35 cents. Incremental dividend payments reflect Westar Energy's willingness to boost shareholders value. The annual dividend yield of 3.96% is higher than the industry average of 2.09%.

Westar Energy currently carries a Zacks Rank #3 (Hold). Other companies in the industry worth considering are NRG Energy, Inc. NRG Otter Tail Corp. OTTR and Public Service Enterprise Group Inc. PEG, all presently holding a Zacks Rank #1 (Strong Buy).