Although markets have been choppy as of late, some sectors have definitely outperformed despite the sluggish environment. One such sector that you may have overlooked is utilities, a space that is usually a more defensive segment, and is also a top choice for yield investors too.
This corner of the stock world has been a strong performer as of late and many companies have outperformed as higher beta stocks lagged. A great example of this trend, and a company that could have more solid trading ahead, is undoubtedly TECO Energy, a firm we have highlighted in greater detail below:
TECO in Focus
TECO Energy, Inc., TE is an electric and gas utility holding company, is engaged in regulated electric and gas utility operations. It generates purchases, transmits, distributes, and sells electric energy to approximately 695,000 retail customers in West Central Florida, as well as to utilities and other resellers of electricity; and has electric generating plants with a winter peak generating capacity of 4,668 megawatts.
The company purchases, distributes, and sells gas to approximately 347,000 residential, commercial, industrial, and electric power generating customers in Florida; and has a distribution system that includes approximately 11,600 miles of mains and 6,700 miles of service lines.
It also operates surface and underground mines; and produces, processes, and sells bituminous, primarily low sulfur coal of metallurgical, pulverized coal injection, steam, and industrial grades in Eastern Kentucky, Southwestern Virginia, and Tennessee. The company was founded in 1899 and is headquartered in Tampa, Florida.
TECO currently ranks as a Zacks Rank #2 (buy) and has beat earnings estimates by an average surprise of .67% since September 2013. TECO is currently trading at $19.28 per share, and down about .05% for intraday trading on Tuesday.
Third Quarter Expectations
TECO has not listed on their website when they will be releasing Q3 results, but consensus estimates for earnings expect the company to come in at 33 cents per share, up one cent from the year before. Revenue is expected to come in at $853 million, up about 1.66% from the year before.
Financial Statistics
TECO energy has done extremely well this year, earning a stock return of about 11.89% for the year with a big help coming from the recent sale of their coal mining subsidiary while also being able to maintain their P/E ratio at a valued rate.
Their dividends history in the past five years has yielded an average rate of 4.94% which would be valued at around 95 cents per share at the current share price. Issuing a dividend since 1985, TECO shows sustained growth which is always a positive for long term investors.
As a mid-sized company with a market capitalization of about $5 billion, TECO is showing promising growth for the future shareholders and with a PEG ratio of 2.9, analysts are expecting earnings to grow annually by about 6.5%.
Recent Corporate Actions
Last month, announced that it has completed the acquisition of New Mexico Gas Intermediate (NMGI), the parent of New Mexico Gas Company (NMGC).
TECO Energy expects the latest transaction to be accretive to earnings from 2015. The company will now serve over 1.5 million regulated electricity and gas customers in Florida and New Mexico, including the strong NMGC customer base.
Many utility providers have noticed that their customers are currently converting their space heating systems to natural gas from other energy sources. The latest acquisition will help TECO Energy to meet increasing natural gas demand, thereby improving future cash inflows.
TECO also announced on October 20th that it signed an agreement to sell its coal mining subsidiary, TECO Coal and its subsidiaries, to Cambrian Coal Corporation, a member of the Booth Energy Group. The total sales price of $170 million includes future contingent consideration of $50 million if certain coal benchmark prices reach certain levels over the next five years. The $120 million cash base purchase price is subject to post-closing adjustments.
On the other side, NMGC customers will benefit from the takeover in terms of estimated savings worth at least $11 million through a credit on their bills within 30 days.
Company Mission
TECO Energy follows an acquisition-focused growth strategy. The company takes over entities with similar lines of operations that are readily accretive. The company completed several significant acquisitions in the past, including Peoples Gas, West Florida Gas and Griffis Gas. These acquisitions allowed TECO Energy to strengthen its footprint in the respective states besides adding new customers to its portfolio.
TECO Energy follows a combination of organic and acquisition-focused growth strategy. The company invested $0.32 billion during the second quarter and plans to spend $2.2 billion between 2014 and 2018. The fund will be primarily utilized for electricity generation, distribution and transmission ventures. These initiatives will help TECO Energy to provide reliable services to its customers.
Bottom Line
We currently have TECO as a Zacks Rank #2 (buy) and project the energy company to report earnings at 33 cents per share, a 9.33% increase in YoY growth estimation. For the current year, consensus estimate suggests that TECO to report earnings of $1.02 per share, again, a 7.60% growth in YoY growth estimation.
In the past two months, in regards to the current quarter estimates, 66% of new estimates were lower for the time frame in question. But for the current year earnings estimate revisions, 100% of analysts have revised their earnings expectations, suggesting the longer term outlook is bright for TE.
Investors should watch out for this stock as it should be reporting earnings soon, and it will be looking to keep up its strong momentum. And if recent performance and full year earnings estimates are any guide, this stock could remain a winner heading into 2015.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
TECO ENERGY TE: Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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TECO in Focus
TECO Energy, Inc., TE is an electric and gas utility holding company, is engaged in regulated electric and gas utility operations. It generates purchases, transmits, distributes, and sells electric energy to approximately 695,000 retail customers in West Central Florida, as well as to utilities and other resellers of electricity; and has electric generating plants with a winter peak generating capacity of 4,668 megawatts.
The company purchases, distributes, and sells gas to approximately 347,000 residential, commercial, industrial, and electric power generating customers in Florida; and has a distribution system that includes approximately 11,600 miles of mains and 6,700 miles of service lines.
It also operates surface and underground mines; and produces, processes, and sells bituminous, primarily low sulfur coal of metallurgical, pulverized coal injection, steam, and industrial grades in Eastern Kentucky, Southwestern Virginia, and Tennessee. The company was founded in 1899 and is headquartered in Tampa, Florida.
TECO currently ranks as a Zacks Rank #2 (buy) and has beat earnings estimates by an average surprise of .67% since September 2013. TECO is currently trading at $19.28 per share, and down about .05% for intraday trading on Tuesday.
Third Quarter Expectations
TECO has not listed on their website when they will be releasing Q3 results, but consensus estimates for earnings expect the company to come in at 33 cents per share, up one cent from the year before. Revenue is expected to come in at $853 million, up about 1.66% from the year before.
Financial Statistics
| Market Cap | $4.50B | P/E(F_1) | 18.87 |
| Enterprise | $7.47B | PEG (5yr) | 2.9 |
| Revenue(ttm) | $2.86B | EPS(ttm) | $0.99 |
| Net Income (ttm) | $209.7M | ROE | 9.06% |
TECO energy has done extremely well this year, earning a stock return of about 11.89% for the year with a big help coming from the recent sale of their coal mining subsidiary while also being able to maintain their P/E ratio at a valued rate.
Their dividends history in the past five years has yielded an average rate of 4.94% which would be valued at around 95 cents per share at the current share price. Issuing a dividend since 1985, TECO shows sustained growth which is always a positive for long term investors.
As a mid-sized company with a market capitalization of about $5 billion, TECO is showing promising growth for the future shareholders and with a PEG ratio of 2.9, analysts are expecting earnings to grow annually by about 6.5%.
Recent Corporate Actions
Last month, announced that it has completed the acquisition of New Mexico Gas Intermediate (NMGI), the parent of New Mexico Gas Company (NMGC).
TECO Energy expects the latest transaction to be accretive to earnings from 2015. The company will now serve over 1.5 million regulated electricity and gas customers in Florida and New Mexico, including the strong NMGC customer base.
Many utility providers have noticed that their customers are currently converting their space heating systems to natural gas from other energy sources. The latest acquisition will help TECO Energy to meet increasing natural gas demand, thereby improving future cash inflows.
TECO also announced on October 20th that it signed an agreement to sell its coal mining subsidiary, TECO Coal and its subsidiaries, to Cambrian Coal Corporation, a member of the Booth Energy Group. The total sales price of $170 million includes future contingent consideration of $50 million if certain coal benchmark prices reach certain levels over the next five years. The $120 million cash base purchase price is subject to post-closing adjustments.
On the other side, NMGC customers will benefit from the takeover in terms of estimated savings worth at least $11 million through a credit on their bills within 30 days.
Company Mission
TECO Energy follows an acquisition-focused growth strategy. The company takes over entities with similar lines of operations that are readily accretive. The company completed several significant acquisitions in the past, including Peoples Gas, West Florida Gas and Griffis Gas. These acquisitions allowed TECO Energy to strengthen its footprint in the respective states besides adding new customers to its portfolio.
TECO Energy follows a combination of organic and acquisition-focused growth strategy. The company invested $0.32 billion during the second quarter and plans to spend $2.2 billion between 2014 and 2018. The fund will be primarily utilized for electricity generation, distribution and transmission ventures. These initiatives will help TECO Energy to provide reliable services to its customers.
Bottom Line
We currently have TECO as a Zacks Rank #2 (buy) and project the energy company to report earnings at 33 cents per share, a 9.33% increase in YoY growth estimation. For the current year, consensus estimate suggests that TECO to report earnings of $1.02 per share, again, a 7.60% growth in YoY growth estimation.
In the past two months, in regards to the current quarter estimates, 66% of new estimates were lower for the time frame in question. But for the current year earnings estimate revisions, 100% of analysts have revised their earnings expectations, suggesting the longer term outlook is bright for TE.
Investors should watch out for this stock as it should be reporting earnings soon, and it will be looking to keep up its strong momentum. And if recent performance and full year earnings estimates are any guide, this stock could remain a winner heading into 2015.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
TECO ENERGY TE: Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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