Credit Suisse picks five favorite utilities stocks for 2014

Credit Suisse suggests investors own utilities boasting good visibility to growth through capital expenditure programs, supportive regulation where the risk of cuts in return on equity is lower, and rate case stay-out protections that lower potential for regulatory intervention; to that end, its favorite utilities into the new year are CMS Energy (CMS), American Electric Power (AEP), NextEra Energy (NEE), Northeast Utilities (NU) and Dominion Resources (D).

Elsewhere in the sector, CS cuts EPS estimates for Entergy (ETR) after the utility received an order in Arkansas pointing to a 9.3% ROE vs. 10.4% requested, which will sustain questions about ETR's ability to execute on its growth strategy; the firm also lowers its EPS outlook for Con Ed (ED) after reaching a broad settlement on electric, gas and steam cases with a 9.2% ROE on electric and 9.3% for steam and gas.

Comments (2)
  • fredu89
    , contributor
    Comments (13) | Send Message
    Long CMS
    3 Jan 2014, 03:03 PM Reply Like
  • Ivanquinchia
    , contributor
    Comments (22) | Send Message
    Beware of utilities exposure to alternative energy integration. Income is being negatively impacted by legislated purchase requirements in Colorado, Hawaii and Arizona, also expanding rapidly in other areas.
    6 Jan 2014, 11:02 PM Reply Like
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