PPL - PPL Corporation: Slow Growth But A Secure Dividend
2024-06-14 00:37:13 ET
Summary
- PPL Corporation has underperformed the market, with shares rising only 4% over the past year, given slow growth and higher rates.
- Q1 earnings showed growth in adjusted EPS, and operating results were solid, aided by more favorably weather.
- PPL aims to grow its rate base by 6.3% per year through a $14.3 billion capital plan, with a focus on efficiency and cost cuts.
- I see risks to growth as skewed to the downside, given its geographic footprint and somewhat higher debt costs.
PPL Corporation ( PPL ) has been a laggard over the past year, rising just 4%. Headwinds from higher rates and slow growth have weighed on its valuation. I last covered PPL in December , rating shares a "hold," as I felt its geographic footprint created some downside risk to earnings targets. Since this analysis, shares have returned 9%, well below the market's 19% return. While this performance has been consistent with my ~8% expectations, given the relative underperformance, one could argue a "sell" rating may have been justified. With updated financials and this underperformance, now is a good time to revisit PPL....
PPL Corporation: Slow Growth But A Secure Dividend