Calendar of Events

Apr 28, 2014 | New York, NY
May 05, 2014 to May 08, 2014 | Las Vegas, Nevada

Keywords

Public Utilities Reports

PUR Guide 2012 Fully Updated Version

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Bank of New York

Perspective

John F. Childs

Do electric utilities understand how to earn profits for shareholders in a competitive market?

Here's one way to look at the problem. Gather a group of financial experts and ask this question: If a company's long-term bonds are rated AA, and yield 8 percent, what minimum return would you require from dividend yield and price appreciation to induce you to buy that company's stock?

The typical expert will say 12 percent, indicating a 4-percent premium (or spread) above AA bond yields.