I bought ED a few years ago (around $43/share), mainly for the dividend. I think of it as a bond that's able to gradually increase its payout over time. The current 4.5% dividend is quite attractive, interest rates have been falling, and underlying weakness in the world economy would seem to indicate a low-interest rate environment for years to come. So why aren't more people jumping on that 4.5% divy? Why would ED fall on a day like today, as interest rates fall further and geopolitical tensions rise? I'm content to just collect that divy each quarter, but the price action is curious to me.
Regardless what you think about Cramer/Mad Money, the CEO was a guest on 4/17. They are in the transmission business and as others said it is as close as monopoly as CO. could be. New CEO seems to have embraced infrastructure, modernization, tech and solar. Would need to read 10-k to get more of a handle, however with NO plants, it seems to be a middleman with the distribution channel to get a needed product to the consumer. Personally bought near 52 week low, for me the dividend was a driver, stock was on sale and the dividend is covered and will continue to rise in small increments. GL
My post from Jan.15, 2014
ED stock is not safe, and having no exposure to nukes will not matter. Recent TPs are in the mid 40s for this stock in the near future. I would highly consider a MLP over this stock.
Consolidated Edison price target lowered to $46 from $49 at Jefferies
January 3, 2014 5:42 AM
in my opinion this company has a few good key points, I used it not only to park my money but I also am a long term holder:
1. its a monopoly in NY
2. you cant live without electricity
3. dividend is OK
4. revenue is stable
5. most repurchased by employees (and that's super duper important)
see you at 60 this year
#4 may not be true. LED light bulb adoption will lower revenue by 5% or more. What are the utilities going to do? Raise rates? That is a question for public service commissions to ponder. Most commissioners are in the pockets of the giant utilities, so maybe we do not have to worry.
1. Monopolies are illegal.
2. its not how you live with electricity, but how electricity it is produced.
3. the dividend is largely produced by higher electricity rates, very inefficient.
4. decreasing revenue has been reported.
5. ed employees repurchase their shares, not knowing of better investments.
see you at 45 or less in the not so distant future...
For the past several years, interest rates have risen in the first half of the year (as economic optimism flourishes), and then dropped in the second half as economic reality sets in (last year was an anomaly because of all the misplaced "taper" talk panic). I happen to think we are in for a decade (or more) of slow growth, low inflation and low interest rates. We are the new Japan.
Consolidated Edison (NYSE:ED) was downgraded by stock analysts at Barclays from an “overweight” rating to an “equal weight” rating in a report issued on Thursday, American Banking and Market News reports. They currently have a $58.00 price objective on the stock, down from their previous price objective of $62.00. Barclays’ price objective would indicate a potential upside of 6.19% from the stock’s previous close.