jarco

Five Companies Worth Researching This Weekend

Florida's upfront power plant financing is coming under fire and likely will fade or be drastically realigned with other states utility regulators.

FPL went after wind and other alternatives because it's boxed in territorially. Geographically surrounded by oceans water and PGN to the north, its unable to merge/expand to obtain synergy efficiencies unlike almost all other utilities over the past decade plus. Since alternatives are so heavily dependent upon favorable tax treatments, long term profitability/viability must be questioned.


On Nov 02 09:35 AM jerrydd wrote:

>
> If a utility is wanted FPL is a far better choice. It's down because
> it's utility division is down in Fla but that will change and it
> is the largest wind producer in the US among other Re and nuke. It's
> getting 2 new nukes for free as Fla is making it's customers pay
> for them up front.

Electric Utilities: Now a Screaming Buy?

As a long time follower and investor in public utilities, I find most of the posted comments both of interest and amusing.

The key utility interest of the last decade (or more) was consolidation, followed by operating efficiencies similar to what's occured in many US companies. Outsourcing construction also contributed. Thus, contrary to many "followers", several electric utilities have become cash machines. Yes, they still borrow heavily but those living in a progressive regulatory environments are able to guarantee ROI at very attractive rates. This assures stability, growing dividends, and a must own for retired or soon to be retired investors. And a growing bunch they are. Ownership demand fuels modest price increases which when coupled with relatively high dividends spells success.

Three Electric Utilities to Own, Three to Avoid

You’re a victim of the “by and hold” disease. Many did the same thing with AT&T, GM, Ford, etc. Like anything else, investment requires continual oversight. AEP’s problems were highly predictable back then.

Gas and Electric Utilities are one of the best places for investment dollars especially for those nearing or at retirement. Safe and predictable cash flow, no competition, and a recession proof product. Food and heat.; food and A/C is hard to beat!




On Feb 04 07:41 AM prudentinvestor wrote:

> Having owned various utility stocks for over 30 years, I would suggest
> only a very modest exposure to the sector. The stocks hardly grow,
> and dividends are reduced from time to time.
>
> As one example, I bought AEP in 1981 and still own the shares. In
> 1981 the dividend was $2.5/yr, but it was cut about 10 years ago,
> and today it is $1.64/yr. If you adjust for true inflation, the income
> from its dividend in terms of buying power is now roughly one-sixth
> of what it was when I bought the stock, 27 years ago!
>
> Moreover, if and when interest rates rise, utilities are likely to
> plunge. So buyer beware.

Three Electric Utilities to Own, Three to Avoid

Daniel Scotto may be well known but he's well off the mark here. DUK and XEL are two of the best positioned utliities. While contraction is happening literially everywhere, don't lose sight of near term recovery. Healthy regulatory environment, top management, and a growth service area are plusses with DUK and XEL not available elsewhere. Short of bailing out (or selling short), current position should be held.