Is Avangrid (AGR) Stock Worth Adding To Your Portfolio?

On May 17, Zacks Investment Research upgraded Avangrid, Inc. (NYSE:AGR) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Avangrid has been witnessing rising earnings estimates on the back of strong first-quarter 2016 results. This electric and natural gas utility reported a positive earnings surprise of 6.78% in the first quarter of 2016. Earnings were up 12.5% year over year. The long-term earnings growth is pegged at 9.0%.

The company is benefiting from its focus to strengthen its generation capacity, primarily adding renewable energy sources to its generation fleet. Avangrid invested $276 million in the first quarter to further strengthen its existing operations. The company intends to invest nearly $1.3 billion over 2016 and 2017, which will expand its installed capacity to 6.5 gigawatts by the end of the period.

Apart from generating more electricity from renewable sources, the company is working to build new and strengthen its existing transmission lines. These new transmission lines will allow the company to smoothly move the electricity generated from its renewable assets to end users.

In addition, the extension of the productive life of certain of its renewable assets to the extent of 25 years is going to have a positive impact on generation capability and earnings.

The Zacks Consensus Estimate for 2016 moved up 8% to $2.16 per share as 100% of the estimates were revised higher over the last 60 days. For 2017, all estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 5.9% to $2.35 per share.

Other Stocks on the Horizon

Apart from Avangrid, Spark Energy, Inc. (NASDAQ:SPKE) also sports a Zacks Rank #1 (Strong Buy). A couple of other favorably ranked stocks in the electric and natural gas utility space are Avista Corp. (NYSE:AVA) and Black Hills Corporation (NYSE:BKH) . Both carry a Zacks Rank #2 (Buy).

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BLACK HILLS COR (BKH): Free Stock Analysis Report

AVISTA CORP (AVA): Free Stock Analysis Report

SPARK ENERGY (SPKE): Free Stock Analysis Report

AVANGRID INC (AGR): Free Stock Analysis Report

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Zacks Investment Research