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Showing posts with label Progress Energy. Show all posts
Showing posts with label Progress Energy. Show all posts
Tuesday, July 10, 2012
Investopedia: Duke Energy Has Made Utilities Interesting Again, For All The Wrong Reasons
Internal corporate politics are often confusing, if not
incomprehensible, to outsiders, but sometimes a corporation goes above
and beyond the call of duty in creating a "what the ... ?" moment for
analysts and investors to ponder. Enter Duke Energy (NYSE:DUK) and what appears to be a scandal-in-the-making regarding its sudden CEO change in the wake of the closing of its acquisition of Progress Energy.
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Thursday, June 14, 2012
Investopedia: Piedmont's Total Return Prospects Look Middling
Utilities are predictable businesses, but not entirely risk free. That's especially true in the case of a company like Piedmont Natural Gas (NYSE:PNY)
where a lot of the company's future growth is predicated on customers
switching over to gas. While Piedmont does enjoy a constructive
regulatory environment and has been a very consistent dividend payer,
buying the shares with a yield below 4% doesn't seem to make all that much sense.
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Monday, March 28, 2011
Investopedia: The Biggest Nuclear Operators In The United States
There is no question that the disaster in Japan has refocused investor attention on nuclear power's future both abroad and in the United States. Although it is true that nuclear power is not nearly as important to the U.S. power infrastructure as it is in some countries (notably France, Belgium, Sweden, Germany and Japan), it is more pervasive than some investors may realize.
More to the point, while there is a wide range of company-level exposure to nuclear power, the reality is that a very large percentage of U.S. utilities have some level of exposure. Given the difficulties of decommissioning nuclear facilities and the trouble of installing alternate capacity, this is unlikely to change.
Nevertheless, investors may find it helpful to keep a cheat-sheet on the exposure levels of major U.S. utilities. Please note that the following tables to include somewhat arbitrary distinctions between "regulated" and "diversified" and that the numbers do not include power purchased under long-term contracts (which can be significant for some utilities).
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More to the point, while there is a wide range of company-level exposure to nuclear power, the reality is that a very large percentage of U.S. utilities have some level of exposure. Given the difficulties of decommissioning nuclear facilities and the trouble of installing alternate capacity, this is unlikely to change.
Nevertheless, investors may find it helpful to keep a cheat-sheet on the exposure levels of major U.S. utilities. Please note that the following tables to include somewhat arbitrary distinctions between "regulated" and "diversified" and that the numbers do not include power purchased under long-term contracts (which can be significant for some utilities).
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http://stocks.investopedia.
Thursday, January 13, 2011
Investopedia: Does Getting Bigger Make Duke Energy Better?
Utility deals are not like other deals. Utilities do not buy each other to get access to cutting-edge technology or popular products nor to take a competitive asset off the market so that it cannot fall into a competitor's hands. Instead, utility mergers are often about finding a few tenths of a percentage of savings here or there and perhaps about creating a more desirable profile of operating markets. To that end, then, it does not really seem all that likely that Duke Energy's (NYSE:DUK) acquisition of Progress Energy (NYSE:PGN) is going to be the start of a wave of utility M&A.
The Deal as It Stands
Duke Energy announced Monday morning that it had reached an agreement to acquire Progress Energy in an all-stock deal. Duke will give each Progress Energy shareholder 2.6125 shares of its stock - a ratio that valued Progress Energy at $46.48 per share based on Friday's closing prices. That in turn represents a 4% premium to Progress's Friday close, and a 7% premium to the price of the utility before deal chatter started to build and push the stock higher.
A Logical Deal ... To a Point
Assuming that the various regulators allow the deal to go through unchanged (more on that later), it will produce the largest utility in the country with over $8 billion in annual operating EBITDA and 57 gigawatts of generating capacity in the U.S.. Impressive as that sounds, it is still a small fraction of the total U.S. electrical generation market.
Where this deal makes sense is in the familiar operating environments of the two companies. For both banks and utilities, the Southeast U.S. is an attractive market for the same basic reasons - above-average population growth and relatively friendly regulatory regimes. Both utilities are major players in the utility-friendly Carolinas, and Progress will give Duke good exposure to the also-friendly (and attractive) market of Florida and increase the percentage of earnings it gains from regulated markets.
Beyond that, this deal will help to mitigate some of Duke's risk exposure to possible troubles in Ohio and Indiana. In Ohio, for instance, Duke is losing out to competitive suppliers due to above-market rates and is trying to convince regulators to allow it to move to "market rate option" pricing.
Please follow the link to the full piece:
http://stocks.investopedia.
The Deal as It Stands
Duke Energy announced Monday morning that it had reached an agreement to acquire Progress Energy in an all-stock deal. Duke will give each Progress Energy shareholder 2.6125 shares of its stock - a ratio that valued Progress Energy at $46.48 per share based on Friday's closing prices. That in turn represents a 4% premium to Progress's Friday close, and a 7% premium to the price of the utility before deal chatter started to build and push the stock higher.
A Logical Deal ... To a Point
Assuming that the various regulators allow the deal to go through unchanged (more on that later), it will produce the largest utility in the country with over $8 billion in annual operating EBITDA and 57 gigawatts of generating capacity in the U.S.. Impressive as that sounds, it is still a small fraction of the total U.S. electrical generation market.
Where this deal makes sense is in the familiar operating environments of the two companies. For both banks and utilities, the Southeast U.S. is an attractive market for the same basic reasons - above-average population growth and relatively friendly regulatory regimes. Both utilities are major players in the utility-friendly Carolinas, and Progress will give Duke good exposure to the also-friendly (and attractive) market of Florida and increase the percentage of earnings it gains from regulated markets.
Beyond that, this deal will help to mitigate some of Duke's risk exposure to possible troubles in Ohio and Indiana. In Ohio, for instance, Duke is losing out to competitive suppliers due to above-market rates and is trying to convince regulators to allow it to move to "market rate option" pricing.
Please follow the link to the full piece:
http://stocks.investopedia.
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