Tue, Mar. 17, 6:37 PM
- Despite the prospect of a Fed rate hike, patient investors should stick with utility stocks for their attractive yields, regular earnings and dividend growth, two analysts tell CNBC.
- While higher rates may look foreboding, Hilliard Lyons analyst David Burks says recent history shows the sector could still outperform, noting that electric utilities beat the S&P 500 "by a fairly wide margin" during the 2004-06 period of higher rates when the Fed raised rates 16 times.
- Morningstar's Travis Miller thinks the sector's short-term performance will continue to reflect interest rate movements, but that investors willing to hold utilities two years or more can get strong absolute returns.
- Burks' favorite income pick is PPL, his top growth pick is NEE, and he likes AEP for total return; Miller's picks include SO, which he says has come down substantially and is now trading a discount, plus DUK and ITC.
- ETFs: XLU, IDU, VPU, RYU, FUTY, UPW, PUI, FXU, SDP
Wed, Jan. 28, 6:58 AM
Tue, Jan. 27, 5:30 PM| Tue, Jan. 27, 5:30 PM | 1 Comment
Wed, Jan. 21, 3:42 PM
Tue, Jan. 6, 11:36 AM
- American Electric Power (AEP +1.8%) has retained Goldman Sachs to explore options for its 7,923 MW merchant generation business, The Street.com reports.
- The power plant portfolio is expected to fetch $350-$450/kwh, which could result in a sale price of $2.8B-$3.6B, according to the report.
- The merchant business is seen as not fitting with the company's profile, as AEP is a regulated utility at its core while merchant power plants are unregulated and sell power into the competitive market where a return is not guaranteed.
Nov. 26, 2014, 12:42 PM
- A new report from BofA Merrill Lynch stays positive on the top utility stocks for the rest of the year and 2015, offering five recommendations for utilities paying high current dividends and expected to raise dividends significantly over the coming years.
- The firm sees Dominion Resources (NYSE:D), which currently pays a 3.3% dividend, growing its dividend 7% this year, in line with the last four; many analysts think the new EPA bill may actually provide a tailwind for the company.
- Also suggested: AEP, PCG, UIL, PPL
Nov. 13, 2014, 2:55 PM
- Chief execs of the top U.S. coal-burning utilities predict blackouts and rising power bills if they are not given more time to achieve greenhouse gas emission cuts described in the new climate agreement with China.
- A proposed timeline for cutting pollution from power plants threatens to shutter coal-fired plants before enough new generation can be built to replace lost supplies, say CEOs of Southern Co. (NYSE:SO) and American Electric Power (NYSE:AEP).
- The challenges go beyond the cost and time it would take to build new plants to replace coal units forced into retirement, Southern's Thomas Fanning and AEP's Nick Akins say; there’s not enough pipeline capacity to carry the natural gas that would be needed by all the newly built gas-fired power plants spawned by the EPA's proposals.
- Southern would have to retire more than 9K mw of coal-fueled generators and add ~5,400 mw of natural gas plants by 2020 under plans envisioned by EPA, Fanning says.
- ETFs: XLU, IDU, VPU, RYU, UPW, FUTY, PUI, FXU
Nov. 12, 2014, 2:14 PM
- Utility stocks, among the year’s top performing sectors in the market, are sharply lower today - a bad sign, says Weeden & Co. head researcher Michael Purves, who believes now is the time to reduce or hedge utility holdings such as the Utilities Select Sector SPDR Fund (XLU -1.9%).
- Ultra-low bond yields have made utility stock payouts look good by comparison., but valuations have been moving up; Purves says the rally has put XLU’s P/E ratio for the next 12 months at 17.4x, near a 10-year high.
- Investors ought to “start to take profits, given the run was getting long in the teeth,” Purves writes.
- The top 10 XLU holdings are all lower today: DUK -2.5%, NEE -1.7%, D -1.9%, SO -1.4%, EXC -2.8%, AEP -2%, SRE -1.7%, PPL -1.8%, PCG -1%, PEG -2.8%.
- Other ETFs: IDU, VPU, UPW, RYU, FUTY, FXU, PUI, SDP
Nov. 11, 2014, 12:13 PM
- American Electric Power (AEP -0.4%) raises its FY 2015 EPS guidance to $3.40-$3.60 from its previous operating earnings guidance of $3.30-$3.60; analyst consensus estimate is $3.56.
- AEP narrows FY 2014 operating EPS guidance to $3.40-$3.50 vs. $3.46 consensus, and reaffirms 2016 guidance of $3.45-$3.85 vs. $3.73 consensus.
- AEP increases its 2015 capex budget to $4.4B and forecasts its 2016 investment budget at $3.8B.
Oct. 23, 2014, 6:58 AM
Oct. 22, 2014, 5:30 PM
- AAL, AB, ACAT, AEP, ALK, ALV, ALXN, ARG, ASPS, AVT, BBW, BC, BCC, BHE, BKU, BMS, CAB, CAM, CAT, CCE, CELG, CFX, CHKP, CLI, CMCSA, CMS, CRI, CRS, CS, CSH, CVE, CWEI, DAN, DGX, DLX, DNKN, DO, DPS, EQM, EQT, FAF, GM, GMT, GPI, GRUB, HERO, HUB.B, IMAX, IVC, JAH, JAKK, JBLU, JNS, KKR, LAZ, LLY, LO, LSTR, LTM, LUV, MDP, MHO, MINI, MJN, MMM, MTRN, NLSN, NOK, NUE, NWE, ORI, OSIS, OSTK, OXY, PCP, PENN, PHM, PLD, POT, PRLB, PTEN, QSII, RCI, RCL, RS, RTN, RYL, SIAL, SILC, SJR, SLAB, SONS, SQNS, STC, TDY, TROW, UA, UAL, UFS, UNP, USG, UTEK, WCC, WSO, YNDX, ZMH
Oct. 8, 2014, 10:40 AM
- Fluor (FLR -0.6%) wins a construction contract from American Electric Power (AEP +0.5%) to provide environmental retrofit services at the company’s Northeastern power station in Oklahoma.
- The project involves adding activated carbon and dry sorbent injection systems for Unit 3 at the plant to control emissions of mercury, sulfur dioxide and acid gasses.
Aug. 4, 2014, 9:26 AM
- Babcock & Wilcox's (NYSE:BWC) construction division has been awarded a contract by American Electric Power's (NYSE:AEP) subsidiary, Southwestern Electric Power, to construct a dry flue gas desulfurization unit at the latter's Flint Creek power plant.
- The new contract will will create hundreds of jobs during peak construction periods in 2015, and is scheduled for completion in mid-2016.
Jul. 25, 2014, 6:58 AM
Jul. 24, 2014, 5:30 PM
Jun. 3, 2014, 12:45 PM
- EPA chief Gina McCarthy says she expects for significant changes in proposed state emission goals before a final rule is issued next year if the individual states show they can’t meet the targets.
- McCarthy says the agency made changes when developing its rules on mercury pollution in 2012 after utilities complained, and says she "wouldn’t be surprised if we made significant” revisions to the carbon proposal.
- McCarthy notes "confusion" around the targeted 30% emission cuts, saying it’s not a goal of the plan but an estimate of what the EPA thinks can be achieved.
- Coal names are broadly lower: WLT -4.4%, ACI -3.7%, ANR -2%, ARLP -1.9%, CNX -1.3%, CLD -0.3%, BTU -0.2%.
- Big utilities are mostly higher: EXC +1.6%, AEP +1%, NRG +0.7%, D +0.5%, XEL +0.4%, SO +0.3%, PEG +0.2%, NEE +0.1%, DUK -0.2%
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, RYE, FENY, UPW, RYU, FUTY, FXN, FXU, DDG, SDP
AEP vs. ETF Alternatives
American Electric Power Co Inc is a public utility holding company, through its subsidiaries, provides electric service, consisting of generation, transmission and distribution, on an integrated basis to its retail customers.
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