E.ON: High-Yield International Utility For The Long Haul

Oct. 6.11 | About: E.ON SE (EONGY)

E.ON AG (OTCQX:EONGY) is the world’s largest integrated utility company, serving more than 26 million customers. E.ON engages in both power generation and distribution. The company generates electricity using coal, natural gas, water, wind, solar, nuclear, and biofuels. E.ON also has an interest in exploration and production of natural gas in the North Sea. Natural gas marketing operations include not only a supply business but also storage and transportation. In addition, E.ON has segments engaged in natural gas liquefaction and energy trading operations. The company buys and sells electricity, natural gas, oil, coal, biomass, and carbon allowances.

Customers of E.ON include business, residential, and industrial users as well as other municipal utilities. Based in Dusseldorf, Germany, the company operates throughout Europe and also in North America. The power generation of E.ON consists of about 73 GW of installed capacity. E.ON distribution networks consist of 1.1 million kilometers of low-voltage and medium-voltage electricity cables plus a 100,000 kilometer natural gas distribution network and 45,000 kilometers of high-voltage power lines.

E.ON pays dividends annually. Supported by a 6.6 percent annualized 5-year cash flow growth rate, the dividend increase during that period is 10.4 percent annualized. The dividend yield is about 10.6 percent based upon recent share price. This is more than twice as much as the average US utility company.

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Disclosure: I am long OTCQX:EONGY.