Stock of the Day

January 1, 2024

Exelon (EXC)

$43.39
+$0.22 (+0.5%)
Market Cap: $43.40B

About Exelon

Exelon Corporation, a utility services holding company, engages in the energy distribution and transmission businesses in the United States and Canada. The company is involved in the purchase and regulated retail sale of electricity and natural gas, transmission and distribution of electricity, and distribution of natural gas to retail customers. It also offers support services, including legal, human resources, information technology, supply management, financial, engineering, customer operations, transmission and distribution planning, asset management, system operations, and power procurement services. It serves distribution utilities, municipalities, and financial institutions, as well as commercial, industrial, governmental, and residential customers. Exelon Corporation was incorporated in 1999 and is headquartered in Chicago, Illinois.

Exelon Bull Case

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

  • Exelon Co. recently reported an earnings per share (EPS) of $0.64, exceeding the consensus estimate of $0.59 by $0.05, indicating strong financial performance and effective management.
  • The company has increased its quarterly dividend to $0.40, up from $0.38, which reflects a commitment to returning value to shareholders. This translates to an annualized dividend of $1.60, providing a yield of 3.73%.
  • Exelon Co. has a market capitalization of approximately $43.10 billion, which signifies its stability and size in the utility sector, making it a potentially safer investment.
  • Recent analyst upgrades, including a price target increase to $44.00 from Scotiabank, suggest positive market sentiment and potential for stock price appreciation.
  • The current stock price is $42.89, which is close to the average price target of $43.38, indicating that the stock may have room for growth based on analyst expectations.

Exelon Bear Case

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

  • Despite the positive earnings report, Exelon Co. has a relatively high debt-to-equity ratio of 1.66, which may indicate higher financial risk and potential challenges in managing debt levels.
  • Insider selling activity, such as the recent sale of 1,463 shares by EVP Colette D. Honorable, could signal a lack of confidence in the company's future performance from those within the organization.
  • While the dividend increase is a positive sign, the dividend payout ratio stands at 62.55%, which may limit the company's ability to reinvest in growth opportunities.
  • Market volatility and economic uncertainties can impact utility stocks like Exelon Co., making them susceptible to fluctuations in stock price and investor sentiment.
  • Analysts have mixed ratings, with five holding a "hold" rating and five giving a "buy" rating, indicating uncertainty in the stock's future performance.

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