NV Energy - Growth & Income

By Zacks | August 29, 2012 AAA

NV Energy Inc. (NVE) has been paying dividends to shareholders for the last five years and currently pays a yield of 3.8%. Also, earnings momentum for this energy company has been in an uptrend since it reported strong second quarter 2012 results, which included a 61.1% earnings surprise.
In May 2012, the company increased its quarterly dividend rate by 31%, thanks to higher returns from its Harry Allen generating station. Strong fundamentals and an attractive dividend yield make this Zacks #2 Rank (Buy) stock attractive for growth seeking investors.
Mixed Quarter
On July 27, 2012, NV Energy Inc. reported second quarter earnings of 29 cents per share, way above last year's 5 cents and 61.1% higher than the Zacks Consensus Estimate of 18 cents.
Revenues increased 9.8% to $740.7 million but marginally fell short of the Zacks Consensus Estimate of $748 million.
NV Energy Inc. expects earnings per share for 2012 between $1.15 and $1.25.
Earnings Estimates Move Up
The past 30 days have seen four of nine estimates for 2012 advance, pushing the Zacks Consensus Estimate higher by 2.5% to $1.23 per share. This reflects an estimated year-over-year growth of 66.1%.
For 2013, the Zacks Consensus Estimate has inched up by a penny to $1.26 per share. This reflects an estimated year-over-year growth of 2.2%.
Stable Dividend
NV Energy has been paying dividends to its shareholders ever since the second quarter of 2007. The present quarterly dividend rate of 17 cents reflects growth of 112.5% from the 2007 level. The current annualized rate of 68 cents per share culminates in a dividend yield of 3.8%.
Reasonable Valuation
Shares of NV Energy Inc. are trading roughly 14.6x the full year 2012 estimate with the PEG ratio at 0.78. The price-to-book is at 1.24x, a 20.0% discount to the peer group average of 1.55x. Also, on a price-to-sales basis, shares trade at 1.42x, a 2.1% discount to the peer group average of 1.45x.
The company has a trailing 12-month ROE of 7.1% compared with the peer group average of 8.3%.
Given the double-digit earnings growth prospect in the current year, the valuation presents a window of opportunity for investors seeking both growth and income.

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Based in Las Vegas, Nevada, NV Energy, Inc. was founded in 1906. This energy company primarily generates electricity from fossil fuel and has a generation capacity of 5,862 megawatts from its 63 generating units. The company has a market capital of $4.22 billion and 2,811 employees. NV Energy competes with Avista Corp. (AVA), among others.

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