Here's Why You Should Add Pampa Energia Stock to Your Portfolio Now

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 #2 (Buy) company a strong investment option at the moment.

PAM’s Growth Projections & Surprise History

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has moved up 51.3% to $10.14 in the past 30 days.

The Zacks Consensus Estimate for 2025 sales is pinned at $2.26 billion, indicating year-over-year growth of 20.2%.

The company delivered an average earnings surprise of 192.4% 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 19.55%, higher than the industry’s average of 9.77%. 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 PAM

Currently, PAM’s total debt to capital is 35.06%, better than the industry’s average of 60.82%.

The time-to-interest earned ratio at the end of the fourth quarter of 2024 was 3.7. 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 1.83 is better than the industry’s average of 0.79. A current ratio greater than one indicates that the company has enough short-term assets to liquidate to cover all 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 fourth quarter of 2024, the company’s net power generation was 4,797 gigawatt-hours, comprising hydro, wind and thermal sources.

In November 2024, the final six wind turbines of PAM’s PEPE 6 were commissioned, reaching a total installed capacity of 139.5 megawatts (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.

PAM’s Stock Price Performance

In the past six months, Pampa Energia’s shares have risen 11.1% against the industry’s 2.8% decline.

Other Stocks to Consider

A few other top-ranked stocks from the same industry are Avista AVA, sporting a Zacks Rank #1 (Strong Buy) at present, and WEC Energy WEC and Exelon Corporation EXC, both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AVA’s long-term (three to five years) earnings growth rate is 6.07%. The Zacks Consensus Estimate for AVA’s 2025 EPS implies a year-over-year improvement of 14%.

WEC’s long-term earnings growth rate is 6.79%. The company delivered an average earnings surprise of 6.3% in the past four quarters.

EXC’s long-term earnings growth rate is 5.71%. The Zacks Consensus Estimate for 2025 EPS implies a year-over-year increase of 6.4%.

 

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This article originally published on Zacks Investment Research (zacks.com).

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