NRG derives revenue from the sale of electricity in the wholesale and retail markets and the sale of capacity. The company also owns a 64.5% interest in NRG Yield, a publicly traded, dividend growth-oriented company that owns 5 GW of long-term contracted renewable assets.
Last Summer, NRG bought Centrica’s North American energy business in a $3.6 billion deal that nearly doubled the number of homes and businesses NRG serves across the United States and Canada. The all-cash deal to buy Direct Energy gave NRG 3 million more retail customers and is expected to generate about $740 million in annual adjusted earnings before interest, taxes, depreciation and amortization.
NRG Energy stock comes with a 3.62% dividend. BofA Securities has set its price target at $45. The consensus target is $45.60, and the shares closed Wednesday trading at $35.93 apiece.
This well-known company is a solid financial play for more conservative investors. Principal Financial Group Inc. (NYSE: PFG) operates in four main segments: Retirement & Income Solutions (RIS), Asset Management (PGI), International and U.S. Insurance.
RIS delivers full-service accumulation, pension products, annuities, mutual funds and other services to individuals and small-to-medium-sized businesses. PGI is a global asset manager. U.S. Insurance provides individual life and disability insurance and group life insurance. Lastly, the International business sells products in Latin America and Asia.
The company posted solid results for the fourth quarter of 2020. Its operating earnings beat the consensus estimate despite a number of one-time headwinds during the quarter. Assets under management growth was well ahead of expectations in both retirement and investment management due to strong fourth-quarter equity results.
Investors receive a very solid 3.87% dividend. The BofA Securities price target is $64. The $61 posted consensus target is also above Wednesday’s closing print of $57.95 a share.
These five outstanding value stocks should continue to do well as the strong rotation to value, cyclical and financial stocks continues. Toss in the added bonus of dividends much higher than the yields of the S&P 500 or the 30-year U.S. Treasury, and there is a strong case for very proactive total return potential with much lower volatility and risk.