SCANA (SCG) Hits 52-Week High On Strong Investment Plans

Shares of SCANA Corp. (NYSE:SCG) touched a new 52-week high of $73.94 on Jun 28. The stock has gained roughly 22.2% so far this year and is outperforming the S&P 500, which is suffered 0.4% loss over the same period.

SCANA has a market cap of $10.49 billion. Over the past 52 weeks, the company’s shares have ranged from a low of $50.01 to a high of $73.94. Average volume of shares traded over the last three months is approximately 905,782.

What’s Driving the Stock?

SCANA invests systematically in growth projects and infrastructure upgrades. Its ongoing nuclear expansion project is a catalyst to future earnings growth. Given SCANA’s financing plan, construction budget and schedule, we believe that it will be able to fund its nuclear expansion project. Management projects 2016 earnings in the range of $3.90–$4.10 per share and expects to achieve the target on industrial expansion and continued customer growth. As the company's capex escalates with new nuclear projects and its investments are recognized in the rate base, its regulated earnings power should improve.

The company’s principal subsidiary, SCE&G, also received the consent of the Nuclear Regulatory Commission to build nuclear reactors. Notably, this is the second approval by the agency to build additional units in the U.S. within a period of two months, after a gap of 30 years. The new units are strategic fits in the rapidly growing state of South Carolina and drivers of earnings growth at SCE&G. The construction cost for the two units is estimated at $3.5–$4 billion over a period of five years. The company’s significant planned investments will aid in the growth of the regulated base rate.

SCANA currently has a Zacks Rank #4 (Sell).

Stocks to Consider

A few better-ranked stocks from the broader energy sector are CVR Refining, LP (NYSE:CVRR) , Boardwalk Pipeline Partners, LP (NYSE:BWP) and Tallgrass Energy GP, LP (NYSE:TEGP) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).