PPL Corporation (PPL) — This energy and utility holding company has been a favorite of mine for several years. I last covered PPL stock on Nov. 6, when it was trading at $36.33.
The stock had just rallied following the release of the company’s third-quarter earnings report. It reported earnings per share (EPS) of $0.54, beating the Zacks consensus estimate of $0.52, and exceeding revenue estimates by 20%. Zacks lauded PPL for its stable financial position, which included $1.19 billion in cash and cash equivalents at the end of Q3.
In my November report, I recommended buying PPL stock on a pullback below $35 with a trading target of $40. Shares fell under $35 in mid-December, hit a high just over $38 on Dec. 29, and then dropped along with the general market decline.
Technically, PPL stock broke into a new bull channel in October with highs connecting the August, November and December tops and lows of October and December. Support is at the lower line of the bull channel at about $35.
PPL stock has been rising on increasing volume and closed Wednesday slightly above our buy point. This is a sound stock in a stable, defensive industry group selling at the bottom of a major bull channel. All trends and most internal indicators are positive, but MACD is slightly negative, indicating shares may drift a little lower.
Buy PPL stock near $35 for a trade to $40-plus. With a dividend yield of 4.2%, shareholders could see a total annual return of almost 20%.
