Many regulated utility investors seek the proverbial sweet spot of "4 - 4 - 4" looking for 4% earnings growth, 4% current yield and 4% dividend growth. ITC Holdings (ITC) sweet spot could be considered "15 - 1.9 - 5.2" as the company has a projected 5-yr eps growth rate of 15%, a current yield of 1.9% and a 5.2% 5-yr dividend growth rate. Regulated utility investors with a bit longer time horizon and a penchant for growth over current yield should review ITC as a core utility holding.
The investment thesis is pretty simple - federally regulated rates of return for transmission assets are 30% higher than most states Public Utility Commission PUC allow and ITC is the only...
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