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Reasons to Add Chesapeake Utilities (CPK) to Your Portfolio

Chesapeake Utilities Corporation CPK and its subsidiaries are engaged in regulated natural gas distribution and transmission operations. Chesapeake Utilities optimizes earnings potential of the existing businesses through organic growth and business transformation initiatives.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projection & Surprise History

The Zacks Consensus Estimate for 2022 earnings has moved up 3.5% in the past 60 days to $4.75 per share. Revenue estimates for 2022 of $612.4 million imply year-over-year growth of 8%.

Chesapeake Utilities has an impressive earnings surprise history. Its trailing four-quarter earnings surprise is 12.6%, on average.

Stable Investments

Chesapeake Utilities makes consistent investments to upgrade and maintain the existing infrastructure as well as expand operations. CPK has invested $1.2 billion since 2025 to strengthen operations and anticipates investing in the range of $750 million to $1 billion in the 2021-2025 time frame.

The well-chalked-out capital expenditure of CPK is also driving earnings growth per share. Chesapeake Utilities expects the investments to help it drive earnings at a CAGR of 9.1-9.5% in the 2016-2025 time frame.

Return on Equity (ROE)

ROE indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, CPK’s ROE is 11.31%, higher than the industry average of 10.2%, which indicates that the company is utilizing its funds more effectively than its industry peers.

Dividend

Chesapeake Utilities has a dividend yield of 1.32% versus the Zacks S&P 500 composite’s average of 1.3%. CPK has a long history of dividend payment, having distributed dividends for 61 consecutive years and raised the annual dividend rate for the past 18 years.

Chesapeake Utilities has doubled its annualized dividend over the past 10 years. CPK’s earnings growth drives dividend.

Price Performance

In the past six months, the stock has gained 17.4% compared with the industry’s 2% growth.

Image Source: Zacks Investment Research

Other Stocks to Consider

Other top-ranked stocks in the Zacks Utilities sector include Duke Energy Corporation DUK, IDACORP Inc. IDA and Alliant Energy LNT, each holding a Zacks Rank #2.

The long-term (three to five years) earnings growth of Duke Energy, IDACORP Inc., and Alliant Energy is projected at 5.3%, 4.4%, and 6%, respectively. Duke Energy, IDACORP Inc., and Alliant Energy delivered an earnings surprise of 2.3%, 5.2%, and 4.4%, respectively, on average, in the last four quarters.

The Zacks Consensus Estimate for 2022 earnings per share of Duke Energy, IDACORP Inc., and Alliant Energy has moved up 0.2%, 0.4%, and 1.9%, respectively, in the past 60 days.


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Duke Energy Corporation (DUK): Free Stock Analysis Report
 
IDACORP, Inc. (IDA): Free Stock Analysis Report
 
Chesapeake Utilities Corporation (CPK): Free Stock Analysis Report
 
Alliant Energy Corporation (LNT): Free Stock Analysis Report
 
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