Stock of the Day

June 15, 2022

PPL (PPL)

$34.75
+$0.60 (+1.7%)
Market Cap: $25.21B

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

PPL Bull Case

Here are some ways that investors could benefit from investing in PPL Co.:

  • PPL Co. has received a "Moderate Buy" rating from analysts, indicating positive sentiment and potential for price appreciation.
  • The current stock price is $34.52, which is close to the consensus target price of $34.00, suggesting that the stock may be fairly valued with room for growth.
  • The company recently declared a quarterly dividend of $0.2575 per share, translating to an annualized dividend yield of approximately 2.98%, providing a steady income stream for investors.
  • PPL Co. has a strong market capitalization of $25.47 billion, indicating stability and the ability to weather market fluctuations.
  • Recent upgrades from analysts, including a price target increase from Bank of America to $35.00, reflect growing confidence in the company's performance.

PPL Bear Case

Investors should be bearish about investing in PPL Co. for these reasons:

  • The company's high P/E ratio of 30.82 suggests that the stock may be overvalued compared to its earnings, which could deter value-focused investors.
  • PPL Co. has a relatively high debt-to-equity ratio of 1.17, indicating that the company relies significantly on debt financing, which can be risky in volatile markets.
  • Insider selling activity has been noted, with significant shares sold recently, which may signal a lack of confidence from those closest to the company.
  • The stock has shown limited price movement, remaining flat recently, which may indicate a lack of momentum for growth.
  • The dividend payout ratio is high at 91.97%, suggesting that a large portion of earnings is being distributed to shareholders, leaving less for reinvestment in the business.

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