Stock on Focus: Great Plains Energy Incorporated (GXP)

Company Profile:

Great Plains Energy Incorporated, through its subsidiaries, generates, transmits, distributes, and sells electricity in Missouri and Kansas. It also provides regulated steam services in St. Joseph, Missouri. The company generates electricity using coal, nuclear, natural gas, oil, and wind resources. It has approximately 6,400 megawatts of generating capacity. The company sells electricity to 846,100 customers in the states of Missouri and Kansas, including 744,900 residences; 98,600 commercial firms; and 2,600 industrials, municipalities, and other electric utilities. Great Plains Energy Incorporated was founded in 1919 and is headquartered in Kansas City, Missouri.

Recent News:

On May 31, 2016, the company announced a definitive agreement for Great Plains Energy to acquire Westar in a combined cash and stock transaction with an enterprise value of approximately $12.2 billion, including total equity value of approximately $8.6 billion.

On May 5, 2016, the company announced first quarter 2016 earnings of $26.0 million or $0.17 per share of average common stock outstanding, compared with first quarter 2015 earnings of $18.5 million or $0.12 per share. The Company is also affirming its 2016 earnings guidance range of $1.65 to $1.80 per share.

Its Board of Directors approved a quarterly dividend of $0.2625 per share on its common stock. The Company’s annual dividend level is $1.05 per share. The common dividend will be payable June 20, 2016 to shareholders of record as of May 27, 2016.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

GXP’s strengths can be seen in its better profitability and better solvency compared with its peers. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 49.71. The current P/BV ratio indicates it is undervalued compared to the average P/BV ratio of the industry and the sector. We rate the Great Plains Energy Incorporated (GXP) a BUY.