Here's Why You Should Add Avista Stock to Your Portfolio Now

Avista’s AVA strategic capital expenditures help it improve its transmission and distribution and generation capacity. This should enhance its overall performance. Regulatory approvals for new electric rates help the company boost its top line. Given its growth opportunities, Avista makes for a solid investment option in the utility sector.Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.AVA’s Growth Projections & Surprise HistoryThe Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 4% to $2.61 in the past 90 days.The Zacks Consensus Estimate for 2025 sales is pinned at $2 billion, indicating a year-over-year increase of 3.1%.Avista’s long-term (three to five years) earnings growth rate is 6.07%. The company delivered a trailing four-quarter average earnings surprise of 31.3%.Debt Position of AVACurrently, Avista’s total debt to capital is 53.82%, better than the industry’s average of 63.37%.The time-to-interest earned ratio at the end of the fourth quarter of 2024 was 2.3. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.AVA’s Dividend GrowthThe company has been consistently increasing the value of its shareholders through dividends. It expects a dividend CAGR of 3.8% through 2025 (from 2021 baseline). Currently, Avista’s quarterly dividend is 49 cents per share. This represents an annualized dividend of $1.96 per share, up 3.2% from the previous level. The company expects a targeted annual dividend payout ratio of 65-75%. Its current dividend yield is 4.94%, better than the Zacks S&P 500 composite's average of 1.3%.AVA’s Focus on Systematic InvestmentsThe company expects to invest nearly $2.98 billion during 2025-2029 in infrastructure upgrades. Capital expenditure is expected to be $525 million, $575 million and $600 million in 2025, 2026 and 2027, respectively. Nearly 48% of the total investments during 2025-2027 are for transmission and distribution. Avista expects an annual rate base growth of 5-6% during 2025-2029, driven by its capital expenditures.AVA’s Share Price PerformanceIn the past three months, the company has returned 8.3% compared with the industry’s growth of 4%. Image Source: Zacks Investment ResearchOther Stocks to ConsiderA few other top-ranked stocks from the same industry are Ameren Corporation AEE, CMS Energy Corporation CMS and CenterPoint Energy CNP, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.AEE’s long-term earnings growth rate is 6.72%. The Zacks Consensus Estimate for 2025 EPS implies an improvement of 6.7% from the bottom line recorded in 2024.CMS Energy’s long-term earnings growth rate is 7.68%. The Zacks Consensus Estimate for 2025 EPS implies an improvement of 7.8% from the bottom line recorded in 2024.CenterPoint Energy’s long-term earnings growth rate is 7.49%. The company delivered an average earnings surprise of 0.76% in the last four quarters. 7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ameren Corporation (AEE): Free Stock Analysis Report CMS Energy Corporation (CMS): Free Stock Analysis Report CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report Avista Corporation (AVA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks