Seeking Alpha: AES Still Waiting For Stability To Translate Into Higher Multiples

Global utility company AES (AES) is still waiting to see some of the tangible benefits of its multiyear restructuring. AES has gotten a lot more realistic about its international growth plans, added the stability of a regulated utility, and sharpened its focus on generating (and distributing) cash flow instead of a growth-at-any-cost philosophy. Nevertheless, the shares have not exactly soared on this transition to the new AES.

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AES Still Waiting For Stability To Translate Into Higher Multiples

Seeking Alpha: AES - Above Average Growth, An Improving Balance Sheet, Higher Dividends

It has taken a number of years, but global electrical utility AES Corp. (AES) finally seems to have a plan in place that can drive reasonable returns for shareholders. While commodity costs and forex represent some challenges for the near term, AES has a good long-term plan in place with respect to driving out costs, focusing on high-potential growth markets, and seeing cash go back to shareholders.

Minimal Surprises In The Fourth Quarter
AES offered relatively few surprises for the fourth quarter. Revenue rose about 1% as reported, with the company's Latin American operations representing about two-thirds of the revenue base. Profitability was better, though, as GAAP gross margin, adjusted gross margin, and proportional gross margin all showed solid progress.

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AES: Above Average Growth, An Improving Balance Sheet, Higher Dividends

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?