DRAX is a Buy30 Apr 2019 12:30
DRAX Growth and income - this refers to some due diligence and research recently done, resulting in
Drax being one energy company rapidly evolving for a flexible, low-carbon and renewable generation future.
It accelerated its strategy with the recent £702m acquisition of Scottish Power’s portfolio of pumped storage, hydro and gas-fired generation assets. This, together with what management calls “attractive investment opportunities throughout our business,” bodes well for future earnings and dividend growth.
City analysts expect earnings to leap 177% this year, putting the shares at less than 13 times earnings. And the multiple falls to around 10 on forecasts of 27% earnings growth in 2020. A prospective dividend yield of 4.3% this year, rising to over 5% next year, adds to the attraction of what has become a compelling growth-and-income story, in my view, this is a “Buy” stock.