Pinnacle West Capital

Methodology

Pinnacle West's Arizona utility operations generate predictable earnings from approved rate cases and infrastructure investments serving Phoenix area growth. Regulatory approval processes create visibility into allowed returns. The stable regulated model makes earnings projections straightforward for this Southwest utility with favorable demographic trends.

Methodology

Pinnacle West typically trades at moderate PEG ratios consistent with regulated utilities, reflecting steady growth from customer additions in growing Arizona markets. The metric should be compared to utility peers rather than broader market. Interest rate sensitivity and regulatory treatment often drive valuation more than growth rate differences.

Methodology

Pinnacle West offers a substantial dividend typical of regulated utilities, making PEGY essential for evaluating total return potential. The dividend provides most of expected total return alongside Arizona population growth. PEGY better captures why investors own utilities primarily for reliable income with modest appreciation from rate base expansion.