Eversource Energy’s ES long-term investment plan will help expand operations. The addition of clean assets in the generation portfolio is expected to further drive its performance.

However, this Zacks Rank #3 (Hold) stock faces risks related to project approvals and rising interest rates.

Tailwinds

Eversource pursues organic growth to expand operations. Systematic expenditure in Grid modernization and advanced meter infrastructure will assist the company in expanding and strengthening operations, as well as efficiently serving electric and natural gas customers. It forecasts a capital investment of $21.5 billion for the 2023-2027 period.

The company forayed into the water business by acquiring Aquarion Water Company in December 2017. Multiple other buyouts, like the New England Service Company and The Torrington Water Company, expanded its customer base and water business.

On May 26, 2023, ES announced that it has agreed to sell 50% interest in an uncommitted lease area of nearly 175,000 acres to Ørsted, located 25 miles off the south coast of Massachusetts. Despite its exit from the unregulated wind business, Eversource is fully committed to the region’s clean energy transition, with its regulated companies building many of the facilities that will enable more than 9,000 megawatts of offshore wind generation to reach the homes and businesses of Southern New England.

Headwinds

The $1.6 billion Northern Pass transmission project of Eversource Energy failed to get approval. This will hurt the company’s growth plans. Risks related to substandard performance from third parties, interest rate increases, stringent regulations and breakdown and failure or damage of operating equipment are potential headwinds for the company. These, in turn, are likely to have an adverse impact on the company’s operation, hurting its utility revenues and margins.

Stocks to Consider

Some better-ranked utilities in the same industry are OGE Energy OGE, NiSource NI and The Southern Company SO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OGE Energy’s long-term (three to five-year) earnings growth rate is pegged at 17.9%. It delivered an average earnings surprise of 19.9% in the last four quarters.

NiSource’s long-term earnings growth rate is pegged at 6.9%. It delivered an average earnings surprise of 0.5% in the last four quarters.

The Southern Company’s long-term earnings growth rate is pegged at 4%. It delivered an average earnings surprise of 11.4% in the last four quarters.

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Southern Company (The) (SO) : Free Stock Analysis Report

NiSource, Inc (NI) : Free Stock Analysis Report

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Eversource Energy (ES) : Free Stock Analysis Report

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