Utility stocks have outperformed the broader market. Can the industry deliver a show-stopping second act?
The utility sector has been one of the best performing sectors in the equity capital markets for more than two years. In many respects, this has been a case of the rising tide lifting all ships.
Which is the best energy company?
(September 2005) Top honors in our first annual financial ranking go to those staying with the basics and to those dealing with soaring commodity prices.
Why current estimation models set allowed ROE too low.
A. Lawrence Kolbe, Michael J. Vilbert and Bente Villadsen
A material capital structure mismatch, which occurs frequently, can lead to material misestimates of the appropriate allowed return on equity, perhaps on the order of 2 percentage points. That is, a 9 percent estimate of the cost of equity can imply an allowed rate of return on equity of 11 percent.
Higher payouts aren't enough over the long term.
George W. Bilicic and Ian C. Connor
Higher payouts aren't enough over the long term.
The past two years witnessed the ascendancy of dividend yield in the valuations of U.S. electric utilities. The recent primacy of yield in utility-industry valuations is the product of a unique confluence of factors. The collapse of most of the industry's non-regulated growth initiatives has resulted in a market that attributes little value to the industry's growth prospects beyond that which has been historically generated by the expansion of rate base-1 to 3 percent.
For The 21st Century
Richard Stavros
For The 21st Century
Interviews by
So it begins again. After several financially tumultuous years, executives at many of the nation's top utilities can once again look to the horizon and ask the growth question worthy of a Caesar: "What worlds to conquer?"
Utility executives are emboldened by bulging free cash flows, improved credit quality, lower operations and maintenance costs, favorable regulatory treatment, growing service territories, and increasing demand for power.
An analysis of the strategic implications of the re-basing of power and utility industry valuations.
Ian Connor
Business & Money
An analysis of the strategic implications of the re-basing of power and utility industry valuations.
Over the past several months, traditional valuation levels have re-emerged in the power and utility industry, with recent premium valuation metrics compressing significantly.
The industry requires new analytical tools to incorporate the realities of today's higher risk operating and investment environment into the equity allowance process.
Mark Ciolek, Wallace Jones, and Dr. William Wilson
Commission Watch
The industry requires new analytical tools to incorporate the realities of today's higher risk operating and investment environment into the equity allowance process.
A close look at the effect of the dividend tax cut reveals a disappointing investor reaction.
Robert G. Rosenberg
A close look at the effect of the dividend tax cut reveals a disappointing investor reaction.
While some predicted a very significant increase in price for utilities if dividend taxes were reduced, the actual price change data show a rather different picture.
Today's volatile markets upset the discounted cash flow model, and others.
Jonathan A. Lesser
DCF Utility Valuation: Still the Gold Standard?
Energy experts debate the pros and cons of the Bush administration's proposal to eliminate the double taxation of dividends.
Richard Stavros
Double Taxation Repeal: Fire or Ice?
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