Exelon Corporation: A Strong Investment Choice in Utilities
Exelon Corporation (EXC) is making systematic investments to enhance its transmission and distribution infrastructure. These efforts should improve the reliability of its services and increase the resilience of its operations. As Exelon continues to capitalize on growth opportunities, it positions itself as a solid investment option within the utility sector.
Let’s explore the key factors that make this Zacks Rank #2 (Buy) company an attractive investment at this time.
Forecasts and Earnings Surprise History
The Zacks Consensus Estimate for Exelon’s 2025 earnings per share (EPS) has risen by 1.1% to $2.66 over the past two months. Meanwhile, the sales estimate for 2025 stands at $23.99 billion, reflecting a year-over-year growth of 4.2%.
Exelon anticipates a long-term (three to five years) earnings growth rate of 5.99%. Notably, the company has achieved an average earnings surprise of 7.6% over the last four quarters.
Financial Health and Solvency
At the end of the fourth quarter of 2024, Exelon reported a time-to-interest earned ratio of 2.4. This ratio, exceeding one, indicates the company’s strong capacity to fulfill future interest obligations comfortably.
Consistent Dividend Payments
Exelon’s reliable performance and robust cash flows enable it to consistently reward shareholders with dividends. The management has declared a quarterly dividend of 40 cents per share for the first quarter of 2025, resulting in an annualized dividend of $1.60.
The company aims to raise its dividend per share at a rate between 5% and 7% each year until 2028, pending board approval. Furthermore, Exelon targets a long-term dividend payout ratio of 60%, aligning with its long-term growth strategy. Currently, the dividend yield stands at 3.41%, considerably higher than the Zacks S&P 500 composite average of 1.38%.
Strategic Investments for Growth
Exelon plans to invest approximately $38 billion in regulated utility operations between 2025 and 2028. This new capital expenditure reflects a 10% increase from previous plans and is geared toward enhancing customer service and grid reliability. The investment breakdown includes $21.7 billion for electric distribution, $12.6 billion for electric transmission, and $3.8 billion for gas delivery during the same period.
Recent Share Price Performance
Over the past three months, Exelon’s stock has gained 19.1%, significantly outpacing the industry average growth of 1.8%.
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Consider These Other Stocks
In addition to Exelon, three other highly-rated stocks in the utility sector include Consolidated Edison (ED), NiSource (NI), and CenterPoint Energy (CNP), all currently holding a Zacks Rank #2. For an extensive list of today’s Zacks #1 Rank (Strong Buy) stocks, click here.
Consolidated Edison boasts a long-term earnings growth rate of 5.57%, with a Zacks Consensus Estimate for 2025 EPS reflecting a 4.1% improvement from 2024. NiSource is targeting a long-term growth rate of 7.91%, anticipating a 6.9% rise in the 2025 EPS as compared to 2024. Meanwhile, CenterPoint Energy aims for a long-term growth rate of 7.49%, with a year-over-year growth of 8% projected for 2025 EPS.
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Exelon Corporation (EXC): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
