Seeking Alpha: Will AES Finally Make Good In 2012?

Waiting for global electrical utility operator AES to pay off as an investment has been a lot like waiting for Godot, though I don't remember so many disappointments in Beckett's play. Although AES has a great collection of power generation assets, it has for some time now and management has never yet managed to wring much value out of them. With new management and a new plan, perhaps long-suffering investors will see some rewards for their patience in 2012.

The New New Plan
Long-term investors in AES have heard enough new plans over the years that they should well be skeptical. In particular, AES has a long history of shuffling the deck – selling this or that project and investing hundreds of millions into the next “big thing” all in the hopes of generating some real returns from a large asset base. Heretofore, it hasn't worked out so well and investors would have frankly done better with a money-market account for the last decade.

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Will AES Finally Make Good In 2012?

Investopedia: 2011 In Review - Utilities

Utilities have a long-held reputation as being safe havens during difficult economic times. After all, while demand for utilities does show some correlation with economic activity, the bottom doesn't usually fall out when times are tough. While it is not fair to say that utility investing was a risk-free way of earning market-beating returns in 2011, it was not hard to find winners in this broad sector.


Deals Drive Results
One thing that quickly jumps out from the list of top performers in the past year is the heavy impact of mergers in the sector. Utilities continue to consolidate as the regulatory and financing burden of new capacity construction works against smaller players, and the benefits of operating efficiency become more significant.

Central Vermont (NYSE:CV), Constellation Energy (NYSE:CEG) and Progress Energy (NYSE:PGN) all posted solid above-market returns this year on the back of buyout bids (from Gaz Metro, Exelon (NYSE:EXC) and Duke Energy (NYSE:DUK), respectively). (To know more about acquisitions, read Analyzing An Acquisition Announcement.)


To read more, please follow this link:
http://stocks.investopedia.com/stock-analysis/2011/2011-In-Review--Utilities--OKE-ED-CNP-AWK1214.aspx

Investopedia: Utilitarian Dividends

It is hardly controversial or innovative to look for quality dividend-paying stocks in the utility space. These companies typically operate as monopolies in their respective regions, and regulators are generally quite willing to grant rates to utility operators that all but ensure solid dividend payouts. That does not mean, though, that the entire industry is uniform and undifferentiated. As with any sector, investors do well to pick and choose among the best options available for their portfolio needs. (For more, see Trust In Utilities.)

Consolidated Edison (NYSE:ED)  
Con Ed is a staple on lists of quality dividend-paying utility companies. Con Ed is the utility that provides electricity, gas and steam to New York City, and the company has a long dividend-paying history and a very secure corporate structure. Today's 4.5% yield is above the industry average, as is its payout ratio. Dividend growth and return on assets (ROA) have been below average, but Con Ed is a strong choice as a cornerstone utility holding.

CH Energy Group (NYSE:CHG)  
CH Energy, the holding company of Central Hudson Gas & Electric, is the electricity and gas distributor for much of upstate New York, as well as operating cogeneration and ethanol operations in other states. Paying a 4.1% dividend yield today, the company could be in position to raise the payout in a year or two. Like Con Ed, CH Energy's payout is above average and the ROA is below average, but the financial stability looks good. (For more, see Dividend Facts You May Not Know.)

Please click the link below for the full piece:
http://stocks.investopedia.com/stock-analysis/2011/Utilitarian-Dividends-ED-CHG-EXC-NST-SO-EONGY-CVA0513.aspx

Note: It should be Southern Company, not Southern Energy. I'll make sure that correction gets made. I don't know why, but I keep making that mistake...