AES
Purchased some AES on friday at $16.94. here is what I like.
1) AES has guided for the higher end of the $1.87-1.97 range they have given in the past. I wouldn't be surprised if earnings are close to $2.00 this year. Which means AES is just trading at 8.5 times this years earnings. Which is significantly less than it's peers for a multiple.
2) AES is guiding for 7-9% annualized EPS growth over the next several years given the consistency of growth, I think AES should trade at a 12-15 multiple given analyst estimates of next FY at $2.09 (which in my opinion may be low). Should easily gives us a FV of mid to late 20's over the next 6-12 months. The chart below shows the conistency of growth.
FY 24 Estimate $1.87-1.97 (Higher end of range)
FY 23 $1.76
FY 22 $1.67
FY 21 $1.52
FY 20 $1.44
FY 19 $1.36
FY 18 $1.24
FY 17 $1.08
3) AES is yielding over 4%, so you do get paid while you wait.
4) AES is a cheap way to play the growth in data centers. As this is a big growth engine for AES.
Conclusion: I think AES is very attractive here. Offering a combo of a solid divy that is growing, a recession resistant consistent growth play, at a very cheap valuation compared to it's peers, with being a solid way to play the data center space. Wil buy more on weakness. All is just my opinion, and I could always be wrong though.
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