Here's Why You Should Add Pampa Energia Stock to Your Portfolio Now
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Pampa Energia S.A. PAM focuses on maintaining asset quality and expanding its generation portfolio. The company benefits from its efforts to expand its operations in the generation, transmission and distribution of electricity in Argentina. Given its strong growth, PAM makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) company a strong investment option at the moment.
PAM’s Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 20.6% to $9.54 in the past 90 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $1.92 billion, indicating year-over-year growth of 11%.
The company delivered an average earnings surprise of 62% in the past four quarters.
PAM’s Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Pampa Energia’s ROE is 12.59%, higher than the industry’s average of 10.45%. This indicates that the company has been utilizing its shareholders' funds more constructively (to generate income) than its peers in the electric power utility industry.
Debt Position of Pampa Energia
Currently, PAM’s total debt to capital is 34.73%, better than the industry’s average of 60.05%.
The time-to-interest earned ratio at the end of the second quarter of 2024 was 2.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
PAM’s Liquidity
The company’s current ratio of 2.33 is better than the industry’s average of 0.86. A current ratio greater than one indicates that the company has enough short-term assets to liquidate for covering all its short-term liabilities, if necessary.
PAM’s Focus on Clean Power Generation
Since 2018, Pampa Energia has been actively developing wind energy, establishing itself as one of Argentina’s leading renewable energy companies. During the second quarter of 2024, the company’s net power generation was 5,067 gigawatt-hours, including hydro, wind and thermal.
Its PEPE VI project is expected to add 140 megawatts (MW) of wind power. In September 2024, the company announced the commissioning of three additional PEPE VI wind turbines, with a combined capacity of 13.5 MW. These turbines will add to the 18 already commissioned, totaling a capacity of 94.5 MW.
PAM’s more than $250 million investment should bring its total installed wind power capacity to 427 MW, positioning it as one of the country’s leading renewable power producers.
