PG&E Corporation (PCG): A Good Addition To Your Infrastructure Stock Portfolio

Insider Monkey09-24

We recently compiled a list of the 10 Best Infrastructure Stocks To Buy Now. In this article, we are going to take a look at where PG&E Corporation (NYSE:PCG) stands against the other infrastructure ...

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In fact, this principle has been pushed to the forefront of investing in 2024 as investor optimism about the potential offered by artificial intelligence has also led to interest in stocks that will enable businesses to set up massive data centers for running their AI workloads.Shifting gears, while AI is expected to reshape America's infrastructure, it isn't the only catalyst. The US' aging roads and bridges have been a constant source of political tension. Two initiatives that will create sizeable catalysts for infrastructure in the US are the Bipartisan Infrastructure Law  and the Inflation Reduction Act . When coupled with the CHIPS and Science Act, these initiatives earm","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2237443465.HKD":"abrdn SICAV I -  GLOBAL DYNAMIC DIVIDEND \"A\" (HKD) INC","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU2237443622.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc USD","BK4585":"ETF&股票定投概念","IE00BFXG1179.USD":"BNY MELLON U.S. EQUITY INCOME \"B\" (USD) INC","LU2237443978.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc SGD-H","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","LU0106831901.USD":"贝莱德世界金融基金A2","BIL":"债券指数ETF-SPDR Barclays美国1-3月国债","BK4081":"电力公用事业","BK4588":"碎股","BK4550":"红杉资本持仓","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","BK4552":"Archegos爆仓风波概念","IE00BD4GTW91.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) INC","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","BK4504":"桥水持仓","LU2237443895.HKD":"abrdn SICAV I -  GLOBAL DYNAMIC DIVIDEND \"A\" (HKD) ACC","IE00BD4GTV84.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) ACC","IE0004086264.USD":"BNY MELLON GLOBAL OPPORTUNITIES \"A\" (USD) ACC","BK4127":"投资银行业与经纪业","IE0004091025.USD":"BNY MELLON GLOBAL OPPORTUNITIES \"B\" (USD) ACC","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU1791807156.HKD":"BGF WORLD FINANCIALS \"A2\" (HKDHDG) ACC","PCG":"太平洋煤气电力","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","IE00BD4GTT62.SGD":"Legg Mason ClearBridge Infrastructure Value A SGD-H (mdis) plus","LU2237443549.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA SGD-H"},"translate_title":"PG&E Corporation(PCG)：您基础设施股票投资组合的良好补充","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PCG":1,"BIL":1},"content_text":"We recently compiled a list of the 10 Best Infrastructure Stocks To Buy Now. In this article, we are going to take a look at where PG&E Corporation (NYSE:PCG) stands against the other infrastructure stocks.\nWhether it's for the services industry or the manufacturing sector, infrastructure is the building block of any economy. In fact, this principle has been pushed to the forefront of investing in 2024 as investor optimism about the potential offered by artificial intelligence has also led to interest in stocks that will enable businesses to set up massive data centers for running their AI workloads.\nThis was evident in a report from Goldman in July. It bifurcated AI firms into four sectors that were numbered according to the timeline at which they would see returns. The first set of firms was chip manufacturers, and its year to July returns sat at 139% and was represented only by one firm. The second set were firms that focus \"on AI infrastructure, including semiconductor firms more broadly, cloud providers, data center REITs, hardware and equipment companies, security software stocks, and utilities companies.\"\nAs per the bank, the 90th percentile return of these AI infrastructure firms was roughly 50% while the average AI infrastructure stock had delivered 22%. Within these stocks, Goldman shared that utilities were the top performers as their returns were 16% between March and May; a performance which ranked in the 98th percentile since 2002 and out shined only by returns during 2003 and 2020. For more details, you can check out Goldman Sachs’ Best Hedge Fund Stock Picks: Top 20 Stocks.\nWhile this performance might be surprising, a look at AI infrastructure demand shows that it shouldn't be. As per research from the Boston Consulting Group, AI power demand can grow by as much as 20% per year by 2030 to sit at 130 Gigawatts and account for 16% of US energy use. America's data center hub Northern Virginia is a clear example of this phenomenon. Local regulators believe that data center energy demand in the state can sit at 11 GW in 2035, and as part of efforts to meet it, $2.5 billion in spending is already underway. Not to mention that the copious amount of heat generated by AI GPUs is creating its own set of problems as estimates show that global AI demand could require as much as 6.6 billion cubic meters of water for cooling by 2027. If you're interested in learning more about AI infrastructure, you can read 15 Best Data Center Stocks To Buy According to Jefferies, Citi and Wall Street Analysts.\nShifting gears, while AI is expected to reshape America's infrastructure, it isn't the only catalyst. The US' aging roads and bridges have been a constant source of political tension. Two initiatives that will create sizeable catalysts for infrastructure in the US are the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA). When coupled with the CHIPS and Science Act, these initiatives earmark a collective $2.4 trillion in government spending to overhaul America's roads and build new factories to make semiconductors.\nUnder these three initiatives, as of September 3rd, 2024, under the Biden Administration, private companies had announced $323 billion in transportation investments for infrastructure such as roads, bridges, and airports. An additional $82 billion has been announced for investments in clean energy manufacturing and infrastructure, while $42 billion and $47 billion have been announced for biomanufacturing and heavy industry, respectively.\nThis spending has also started to yield results. The IRA marked its first anniversary in July 2023 and by then it had added 170,000 new jobs and 272 new projects via $272 billion in investments. Some of the notable infrastructure wins included Minnesota's largest solar power plant. For more details, take a look at 10 Best Manufacturing Stocks To Buy According to Analysts.\nOf course, while government spending has catalyzed infrastructure spending, it doesn't mean that the tailwinds faced by the sector are over. Infrastructure build outs hinge on low interest rates since they require vast amounts of capital. With interest rates at a 24 year high in the US, the industry has suffered. This has come in the form of US construction spending slowing down to $2.1 trillion in May for a 0.1% drop. The slowdown is led by public works and healthcare projects which dropped by 3.4%. Delving deeper into the 0.1% sequential drop in May, it was led by private, residential, and single family construction which dropped by 0.3%, 0.2%, and 0.7%, respectively.\nYet, high rates are not always bad news for infrastructure stocks. Since these stocks rely on sizeable and stable income from large projects, they often reward investors in the form of dividends. Higher rates mean bond yields increase and compete with infrastructure stock dividend yields. This forces these firms to attract investor capital by passing through higher costs to their projects (think of higher toll fees). Once these costs have passed through, infrastructure stocks can increase their dividends. Data shows that after six months, one year, three years, and five years following the Federal Reserve's last rate hike cycle, stocks that were part of ClearBridge's RARE 200 infrastructure investment strategies posted 15%, 28%, 44%, and 90%, respectively. This enabled them to lead global equities by five, 13, 19, and 38 percentage points, respectively.\nOur Methodology \nTo make our list of the best infrastructure stocks to buy, we listed the US listed holdings of iShares' infrastructure ETF that tracks global equities by the number of hedge funds that had bought the shares in Q2 2024. Out of these, the top infrastructure stocks were chosen.\nWhy are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).\n Brightly-lit nighttime view of an electricity power grid with distribution lines and transmission substations. \nPG&E Corporation (NYSE:PCG)\nNumber of Hedge Fund Holders In Q2 2024: 46\nPG&E Corporation (NYSE:PCG) is an electricity and gas company that caters to the needs of consumers in California. As of H1 2024, 72% of the firm's revenue came through electricity. This means that PG&E Corporation (NYSE:PCG) is dependent on regulated ROE's and electricity prices that are locked in. Additionally, electricity is also a seasonal market which sees demand grow in the summer season and drop during winters. Since it's a utility, PG&E Corporation (NYSE:PCG)'s fate is dependent on regulators to a large extent, and this has been true for the last year and a half. The firm has sought the California Public Utilities Corporation's (CPUC) approval to sell 5.6 gigawatts worth of non nuclear generation assets. However, the CPUC has rejected the plan to create hurdles in PG&E Corporation (NYSE:PCG)'s efforts to raise capital to manage wildfire risks and fund clean energy growth.\nWhile the CPUC hasn't been kind to PG&E Corporation (NYSE:PCG) for the sale's approval, it did recently approve higher ROE's. Here's what management shared during the Q2 2024 earnings call:\n\n\"Just this month, in fact, the CPUC voted out Phase 2 of our general rate case, authorizing an incremental $2.3 billion of capital investment for energization with an opportunity to go back in and request more if customers need it. We were encouraged by comments from the commissioners, which supported the thesis that connecting new load can be beneficial for broader customer affordability. At the same meeting, the CPUC approved staff’s resolution affirming increasing our return on equity to 10.7%. California’s regulatory environment is strong, forward-looking, and delivers real value for customers and investors. \"\n\nOverall PCG ranks 4th on our list of the best infrastructure stocks to buy. While we acknowledge the potential of PCG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PCG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.   \nREAD NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.   \nDisclosure: None. This article is originally published at Insider Monkey.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2469498135"}