Recent Transaction Overview

On December 31, 2024, Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio) executed a strategic stock transaction involving Pinnacle West Capital Corp (PNW, Financial). The firm added 37,768 shares to its holdings, marking a 0.55% increase in its position. This acquisition was made at a price of $84.77 per share, impacting the firm's portfolio by 0.01%. Post-transaction, Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio) holds a total of 6,864,993 shares, representing 6.04% of its holdings in Pinnacle West.

About Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio)

Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio), led by Executive Director Mr. Barrow, is a Dallas-based investment firm known for managing the Vanguard Windsor II and Selected Value Funds. The firm is recognized for its disciplined investment philosophy, focusing on equity portfolios with below-market price-to-earnings and price-to-book ratios, coupled with above-market dividend yields. This approach has consistently delivered strong returns, as evidenced by the Selected Value Funds' average annual return of 9.33% over a decade, outperforming the market's negative returns during the same period.

Pinnacle West Capital Corp Overview

Pinnacle West Capital Corp is a holding company with its principal subsidiary, Arizona Public Service, serving 1.4 million customers in central Arizona. The company operates across various segments, including Retail Electric Service and Wholesale Energy Sales. With a market capitalization of $10.18 billion, Pinnacle West is a significant player in the utilities sector. The company owns or leases over 6 gigawatts of power generation capacity, with a notable 29% stake in the Palo Verde nuclear plant, one of the largest in the U.S. Half of the electricity supplied by Arizona Public Service comes from clean energy sources, including nuclear.

Transaction Impact and Stock Performance

The recent acquisition by Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio) has positioned the firm as the largest holder of Pinnacle West shares. The stock's current price is $89.51, with a GF Valuation indicating it is fairly valued at $87.85. Since the transaction, the stock has gained 5.59%, and it has shown a year-to-date price change of 6.17%. The firm's strategic move reflects confidence in Pinnacle West's potential for growth and stability.

Financial Metrics and Rankings

Pinnacle West boasts a GF Score of 81/100, suggesting good outperformance potential. Key financial metrics include a PE ratio of 16.95 and a return on equity (ROE) of 9.75. The company's Profitability Rank is 8/10, indicating strong profitability. Despite a Z Score of 0.81, which suggests some financial risk, the company's interest coverage ratio of 2.78 demonstrates its ability to meet interest obligations.

Other Notable Investors

Besides Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio), other notable investors in Pinnacle West include Joel Greenblatt (Trades, Portfolio) and Jefferies Group (Trades, Portfolio). These investors' involvement underscores the stock's attractiveness within the investment community, further validating the firm's decision to increase its stake.

Conclusion

The recent transaction by Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio) highlights the firm's strategic approach to investing in Pinnacle West Capital Corp. With a focus on undervalued stocks offering strong dividend yields, the firm has positioned itself to benefit from Pinnacle West's stable performance and growth potential. As the largest holder of Pinnacle West shares, Barrow, Hanley, Mewhinney & Strauss (Trades, Portfolio)'s investment decision reflects a calculated move to enhance its portfolio's value.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.