Australian electricity provider AGL Energy (ASX:AGL) has earned its place in TipRank’s “Perfect 10” Smart Score rating club, amid a tumultuous year, marked by leadership shakeups and a failed takeover bid.
The TipRanks Smart Score tool ranks shares on a one-to-10 scale, offering a gauge into their potential to deliver returns below or above market averages. Historically, shares with a “Perfect 10” score label have outperformed the market.
AGL’s rocky year so far
The energy wholesaler and retailer has made several changes in both its board and management team, some attracting criticism. For example, Mike Cannon-Brookes, the largest shareholder in AGL Energy, pushed back against the appointment of Patricia McKenzie as the company’s board chair.
The company also parted ways with its CEO Graeme Hunt. AGL is on the hunt for a top executive, but for now CFO Damien Nicks is handling that role on an interim basis.
Early in the year, Canada’s Brookfield Asset Management and Cannon-Brookes’ Grok Ventures teamed up in a takeover bid for AGL Energy. They offered to purchase the company at AU$7.50 a share for a total value of AU$5 billion. AGL Energy’s board knocked back the offer.
The company has also announced plans to drop coal from its power plants by 2035, about a decade earlier than its previous coal exit target.
AGL Energy share price prediction
Currently trading under AU$7.30, AGL stock has dropped below the rejected takeover price. AGL Energy shares have declined about 10% in the past three months, but they have gained nearly 20% year-to-date. According to TipRanks’ analyst rating consensus, AGL stock is a Moderate Buy. The average AGL share price prediction of AU$8.63 implies over 18% upside potential.
AGL Energy insiders, such as directors and executives, are backing their stock. TipRanks’ Insider Trading Activity shows that Insider Confidence Signal is currently Very Positive. AGL corporate insiders have collectively purchased shares worth around AU$313,000 in the past three months.
Concluding thoughts
In addition to offering a robust upside potential, AGL stock also offers an above-average dividend yield of more than 4.2%. The company’s modest 13% payout ratio also signals that the dividend program is sustainable.
