ONE Gas
OGS
recently announced its 2023 financial goals and updated its five-year growth rates. The company is planning to further strengthen its infrastructure and properly execute its business strategy, which will ultimately allow the company to meet customer demands.
2023 Guidance
Taking into account the benefit of new rates and customer growth, ONE Gas currently expects 2023 net income to be in the range of $224 million to $238 million, with earnings per diluted share of $4.02 to $4.26.
The 2023 expectation is a tad higher than the 2022 net income expectation in the range of $217-$226 million and earnings per share in the band of $4.00-$4.16.
The midpoint of 2023 guidance is $231 million in net income and $4.14 earnings per diluted share.
The midpoint of the guidance is lower than the current Zacks Consensus Estimate for 2023, which is pegged at $4.35 per share.
ONE Gas’ 2023 capital investment, including asset removal costs, is expected to be around $675 million and capital investments for extensions to new customers are expected to be nearly $185 million, primarily due to continued growth opportunities in Texas and Oklahoma.
Long-Term Investment
ONE Gas expects its capital expenditure for 2023-2027 time period to be $3.6 billion or in the range of $675 million to $775 million per year. The long-term capital expenditure includes growth capital of $1 billion. The current long-term investment plan is an improvement from its previous five-year investment target of $3.5 billion for 2022-2026 time period.
Net income is expected to increase by an average of 7% to 9% annually through 2027, with diluted earnings per share of 4% to 6%. Operating costs over the next five years are expected to increase on average by nearly 5% per year.
Subject to the approval of its board of directors, the company expects to achieve an average annual dividend growth rate of 4% to 6% through 2027.
Price Performance
In the past year, shares of ONE Gas have rallied 7.5% compared with the
industry
’s 19.5% growth.
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Zacks Rank & Other Key Picks
ONE Gas currently has a Zacks Rank #3 (Hold). Other top-ranked stocks in the Utilities sector include
Pinnacle West Capital
PNW
,
NiSource
NI
and
Global Water Resources
GWRS
. Each of these companies currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Pinnacle West, NiSource and Global Water Resources delivered an average positive earnings surprise of 116.1%, 0.3% and 180%, respectively, in the last four quarters.
The Zacks Consensus Estimate for 2022 earnings for Pinnacle West, NiSource and Global Water Resources has moved 2.8%, 0.7% and 5% upward, respectively, in the past 60 days.
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