Exelon (EXC -6.9%) shares accelerate their descent after CEO Chris Crane says the utility...

Exelon (EXC -6.9%) shares accelerate their descent after CEO Chris Crane says the utility company may cut its dividend for the first time to maintain an investment grade credit rating, which is “fundamental” to about half of EXC’s businesses. EXC’s credit is rated at the second-lowest investment grade, BBB by S&P and Baa2 by Moody’s. (earlier: Q3 earnings)
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Comments (8)
  • MexCom
    , contributor
    Comments (3077) | Send Message
    I didn't see anything from him saying he was going to cut the dividend. He said the dividend would be in review going into 2013 - the BOD always reviews the situation before declaring the dividend. To me this means the current dividend will remain unchanged. It already has been declared and payable on December 10.


    The stock price stabilized toward the close today and closed off of its low at $33.58. This was more than 1 percent higher than the low for the day. It would have been better to say this than to say "accelerated their decent."
    1 Nov 2012, 04:32 PM Reply Like
  • fiveoh
    , contributor
    Comments (173) | Send Message
    Did you read the Q&A? It sounds like they do have cutting the dividend as an option if things dont pick up in the next 6 months.
    1 Nov 2012, 07:45 PM Reply Like
  • mix
    , contributor
    Comments (104) | Send Message
    The yield using today's closing price is well over 6%.
    1 Nov 2012, 08:15 PM Reply Like
  • cdeligdisch
    , contributor
    Comments (2) | Send Message
    I started investing since I retired in 1998. Till 2008 I had reasonable gains. From then on it became more challenging. Buying into EXC Oct.11/12 proved to be a big mistake. I followed the recommendation in the Canadian "Money Sense" magazine Sept/Oct.2012 issue listing EXC as a bargain stock which Buffett might buy. It appeared that it hit near the bottom. I felt uneasy even before the Sandy disaster when the stock dropped for six consecutive days, today's dive confirmed that I made a bad investment and Mr. Chris Crane's discussion did not improve my confidence, especially at my age. I will make a decision tomorrow if the slide continues
    2 Nov 2012, 01:55 AM Reply Like
  • yzhu
    , contributor
    Comments (32) | Send Message
    The fact that they mentioned div cut on the CC is reason enough for me to sell all my shares. Can't win them all.
    2 Nov 2012, 11:11 AM Reply Like
  • viperman
    , contributor
    Comments (314) | Send Message
    Bye bye Exelon from my portfolio! Nice knowing ya! I like my utilities a little more stable than this. There is a world of other ticker symbols out there for my hard earned money.
    2 Nov 2012, 02:36 PM Reply Like
  • papercut
    , contributor
    Comments (132) | Send Message
    Direct quotes from the Q&A:


    Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division


    And when -- how soon would you act on the dividend if -- when you do your 6-month look and things haven't improved, under that scenario, would you do something immediately?


    Christopher M. Crane - Chief Executive Officer, President, Director and Member of Generation Oversight Committee


    I couldn't venture to say that. We've got to see what's going on in the market. We have had a lot of conversations with the board if we got to that point, but -- and I said we wouldn't surprise anybody. We'll have many more conversations between here and there, but couldn't commit to a time frame. As I said, we believe the market is going to come back. We believe the market has to come back. And so we're more on the side "let's get the market back" than we are "here's the date we would plan on cutting a dividend."




    Dan Eggers - Crédit Suisse AG, Research Division


    Okay. And then I guess, Chris, just I don't want to belabor the dividend question. But when you and the board stepped back and kind of looked at the dividend relative to the business mix and the earnings power, how do you guys think about your coverage or payout ratios between the utility and the generation businesses as you formulate kind of comfort with a dividend at a certain level?


    Christopher M. Crane - Chief Executive Officer, President, Director and Member of Generation Oversight Committee


    So what we've done in the past, we have a more traditional payout strategy for the utilities, 65% to 70%. And that resonates well as we benchmark to other regulated entities. On the growth side for the competitive part of the integrated, we have tried to benchmark more of the yield and keep track with the sector and the yield. Now since we've got a little bit more damage with the gas and our concentration in NiHub, our yield is 5.9%, last time I looked at it where the others are probably 1% lower, if not more. So we're outpacing the yield. Now we get this $0.70 back, it's a different conversation. And we're more sensitive to the upside. And that's what -- we just got to reaffirm with -- in our policy as we look at this, is that the right thing? We think we're hitting the stress low, and we think the recovery is there. But that would be part of the conversation, how do you benchmark the yield and the payout percentage on that other side of the business?
    3 Nov 2012, 12:53 AM Reply Like
  • spinrbait
    , contributor
    Comments (701) | Send Message
    i can't understand what he is even talking about
    4 Nov 2012, 09:34 PM Reply Like
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