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Just The Numbers: 6 Electric And Gas Utilities

Apr. 11, 2018 12:31 AM ETAES, CMS, D, DTE, EIX, SJI41 Comments


  • Electric and gas utilities are generally “sleep-at-night” investments offering dividend yield and stable growth.
  • Utilities are expected to provide their customers completely reliable service at low cost; they thus must balance a range of capital-intensive fuel sources and infrastructure to meet these goals.
  • With their debt-heavy structures, these companies are subject to increasing interest rate costs.

Several mid-range utilities give investors good choices about dividend yield or dividend yield plus earning-per-share growth among a group of companies whose stock prices are considerably less volatile than the overall market.

General Background and Specific Companies

From an investor’s standpoint, this group of six companies is mid-range, with interesting dividend yields and average analyst ratings that are between “buy” and “hold” though generally closer to “buy.” They include AES Corporation (AES), CMS Energy (CMS), Dominion Energy (D), DTE Energy (DTE), Edison International (EIX), and South Jersey Industries (SJI). Most are electric or electric and natural gas retail utilities; SJI is natural gas only. This report uses stock symbols for reference since many of the company names include these symbols.

Market Capitalization, Stock Price, and Current vs. 1-Year Target

Based on April 9, 2018 closing prices, D has the largest market capitalization at $43.3 billion. CMS, DTE, and EIX are clustered at $12.7 billion to $20.7 billion. SJI is the smallest, an outlier with a $2.4 billion market capitalization. Recall that SJI is a natural gas-only utility.

Reflective of low volatility (discussed below), good prospects, and perhaps concern about debt levels, all of these companies are reasonably close (88-95%) to their one-year target prices.







v 1yr tgt





CMS CMS Energy




D Dominion Energy




DTE DTE Energy




EIX Edison Int'l




SJI South Jersey Ind




Current Ratio, Dividend Yield, and Price-to-Earnings Ratios

The current ratio measures liquidity: it's the ratio of a company’s current assets to its current liabilities. A current ratio does not include credit facilities or borrowing bases, so the ratio is of interest but not definitive. A ratio of 1.0 is a

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This article was written by

Laura Starks profile picture
Long ideas for energy investors

Do you want to understand and invest in volatile energy markets? We bring fundamentals-based insights to oil, gas, utilities, renewables, and gasoline companies for real-world investors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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