When last I wrote about European utility company Veolia (NYSE:VE)
for Investopedia (back in March of 2012), I was cautious about the
near-term prospects on the stock given the Street's likelihood of buying
into (or rather, not buying into) the company's asset disposal and
cost-cutting plans. The stock then proceeded to lose about one-third of
its value over the next nine months, as worries about both management's
ability to execute and the health of Western Europe's economy weighed on
shares.
As this was happening, though, the company actually started making
progress, and the shares have been moving up strongly since mid-summer
as the Street has finally started buying the turnaround
story. From where Veolia sits today, I see both opportunity and risk – I
happen to side with the bulls who believe management will succeed in
its cost-cutting targets, but I also have my worries about the extent to
which the company may have to surrender these benefits to customers in
order to maintain the business. All told, I see only modest upside to
the shares right now, but the dividend isn't bad and I think the company
can contain most of the risks it faces.
Please follow this link for more:
http://www.investopedia.com/stock-analysis/082013/veolia-offers-decent-dividend-both-uncertainty-and-upside-ve-wm-strny-szevy.aspx
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