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Consolidated Edison, Inc. Message Board

  • thomasaug thomasaug Sep 24, 2011 11:46 AM Flag

    Is ED overvalued?

    See a lot of people here are discussing whether ED is recession proof and I am questioning it's viability as an investment at this pricing. I do like the stock, but not in this market and at this price.

    I like to hold a portfolio of investments that I drip into, as I am only 32 and have plenty of time to retirement.

    Originally bought ED at the $40 range during the recession. Somewhat regret doing so, despite the run-up, as many other investments ran more since then, but ED allows me to sleep easily at night and is part of a fairly well-balanced portfolio.

    I'm not a short and do hold a small position in the stock (50 shares or so (fractional shares in a DRIP)). Been meaning to add more for the past two years, but have been hesitant to because of the price runup. From watching past patterns, it has been beneficial to drop when the yield declines below 5% and add when it goes up to 6%. I don't constantly buy and sell my holdings (just dollar cost average in and trim some that get very overvalued).

    Honestly wouldn't add to my position here, as there are quite a lot of other positions that have dropped significantly and look like better buys. I personally would (and am) adding to more aggressive positions than ED as the market tanks. I've been adding to some large oil co's (TOT), some regional banks (NYB and FNFG), and some industrials (EMR), as they seem like better long-term buys long-term. I like to buy stocks when they are on sale and not overconcentrate in any one company.

    Your own decision to buy is dependent on your risk tolerence, how close you are to retirement, your individual portfolio, etc. Just wondering what others think of ED's ability to outperform other positions and would like to see other's thoughts on why they would add to this position at this time.

    Some people don't care about outperforming and care more about stability of dividends, etc. But does ED really seem like a great buy at $56 with a $2.60 (4.7%) dividend when you can buy Total (just an example...not touting the stock, and can be said with many other stocks on sale) at $41 with a $3.24 (7.9%) dividend? TOT also has a much lower debt to equity (and whatever other standard) and lower payout ratio than ED. Of course, different companies and different industries.

    My main point of this post is to see why people seem to like ED so much and why it has so much support at this price.

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