SOJF - OGE Energy: Benefiting From The Safe Haven Trade, But Wait For A Pullback

2025-04-22 07:21:40 ET

Summary

• OGE Energy Corp. is a regulated electric utility serving 900,000 customers in Oklahoma and western Arkansas, with a significant focus on Oklahoma.
• OGE Energy's stock has outperformed the S&P 500 Index, acting as a safe haven during market uncertainty, but appears somewhat expensive based on forward earnings growth.
• The company has been experiencing massive load growth in excess of its customer base growth, which could prove to be a growth opportunity if it continues.
• The company's capital investment program aims for a 5-7% earnings per share growth, promising a 10-12% total return annually over the next three to five years.
• Potential investors might consider waiting for a market pullback before purchasing shares, given the current valuation relative to its projected earnings growth.

OGE Energy Corp. ( OGE ) is a regulated electric utility that serves residential, commercial, and industrial customers in Oklahoma and western Arkansas:

As we can see, the company’s service territory covers most of the state of Oklahoma, which alone gives it a fairly large service territory in terms of geography. Oklahoma has a total land area of 69,699 square miles, and we can see that the company’s service territory covers about half of that. The state is mostly rural, though, so it does not have nearly the customer base that we might expect for a utility with that geographic reach. OGE Energy states on its website that it serves approximately 900,000 customers, which makes sense given that the population of Oklahoma is about 4,126,900 people according to World Population Review . This actually makes it significantly larger than a company such as NorthWestern Energy Group ( NWE ), which has a wider geographic reach but a lower customer count....

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