Yahoo News Clearway Energy (CWEN) to Gain From Acquisitions & New Assets
Clearway Energy Inc. CWEN is expected to further benefit from its focus on North American operations and modern utility-scale clean renewable projects that ensure high fleet availability and low maintenance costs. The company is also increasing its shareholders’ value via dividend hikes.
However, this Zacks Rank #1 (Strong Buy) stock has to face risks related to underperformance of its third-party transmission lines that are used to supply electricity.
Tailwinds
Clearway Energy is primarily focused on North America, which saves it from currency fluctuation and sovereign risks. North America provides an excellent opportunity to expand CWEN’s operations through acquisition of renewable and natural gas-fired generation assets.
The company expects to attain high fleet availability and modest maintenance-related capital expenditure on the back of its modern generation portfolio that includes a substantial number of solar and wind generation assets.
The new and long-lived assets in the portfolio give the company a competitive advantage and boost its margins. Apart from organic growth, it is also making acquisitions to further expand its renewable operations.
On Oct 3, 2022, CWEN, through an indirect subsidiary, acquired Waiawa BL Borrower Holdco LLC from a subsidiary of Clearway Group for a cash consideration of $20 million. Waiawa BL Borrower is the indirect owner of the Waiawa solar project — a 36 MW solar project in Honolulu, Hawaii, with a storage capacity of 144 MWh. This project has a 20-year power purchase agreement.
Headwinds
Clearway Energy relies on certain electric interconnection and transmission facilities that are not owned or controlled by it. If the third-party facilities fail to provide the company with adequate transmission capacity, its ability to deliver electric power may be restricted. This may either incur additional costs or forego revenues for CWEN.
Other Stocks to Consider
Some other top-ranked stocks for investors interested in the same sector are Vaalco Energy EGY, Vista Oil & Gas VIST and Cactus, Inc. WHD, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vaalco Energy, Vista Oil & Gas and Cactus’ 2023 earnings per share indicates an increase of 46.98%, 48.81% and 34.24%, respectively.
In the last four quarters, Vaalco Energy, Vista Oil & Gas and Cactus delivered an average earnings surprise of 80.7%, 37.9% and 10.9%, respectively.
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Vaalco Energy Inc (EGY) : Free Stock Analysis Report
Cactus, Inc. (WHD) : Free Stock Analysis Report
Clearway Energy, Inc. (CWEN) : Free Stock Analysis Report
Vista Oil & Gas, S.A.B. de C.V. Sponsored ADR (VIST) : Free Stock Analysis Report
