Solar power is a complete nonfactor, natgas prices is the key. I see nat gas price stabilizing in this area, so the big driver for EXC in the near future are interest rates. My guess is EXC stock price settles in this area, not much upside until some form of a carbon tax is instituted. Which unfortunately will not happen as long as the caretakers of the fossil fuel industry (Republican Party) remain in control.
Earnings and Mgt's guidance was to say the least rather disappointing. Now I think EXC trades like a bond in the short-term, at the mercy of the direction of interest rates. Longer term it is all about nat gas prices, future carbon taxes. I am more positive on the latter, the glut in nat gas does not seem to subsiding. I realize the infrastructure to export LNG is moving along at a fairly good pace but until coal powered plants are mothballed, especially in the emerging markets I don't see nat gas prices moving much higher. Presently China, India are building a couple new coal powered plants a month, no surprise considering coal is cheap and they both have coal resources. My gut feeling on interest rates is the recent rise is a head fake and we head lower later in the year, which is definitely not the consensus on Wall Street. I believe the globe remains awash in overcapacity and the currency war are in the early stages which will push the U.S. dollar higher keeping inflation and rates contained. I also believe the Fed will raise rates but it will only be a symbolic gesture to move away from zero, it won't have much impact. But if my premise on interest rates prove to be wrong and yields continue to rise, all bets are off and EXC could easily fall to $30. Today's earnings did not provide much of a floor.
Appears Conrad was wrong this time, although I like the outlook for EXC longer term. Waiting to pull the trigger near 32.50
The power generated by nuclear competes with carbon fuel sources on the open market. If carbon fuel prices do not reflect the true costs to our environment then they are subsidized and puts nuclear generated power at a disadvantage, therefore hurting EXC's earnings.
Well I was planning on getting back in around the $33 level but after these disappointing earnings and interest rates rising I just might wait until $32. No need to rush in. EXC remains a merchant utility and until we see a spike in nat gas prices from these historic low levels or some form of a long overdue carbon tax, EXC will have a difficult time moving higher.
Strange you choose to post the same garbage via a number of different screennames. You are absolutely clueless with your ludicrous vendetta that EXC halt it's dividend in favor of paying down debt. As far as utilities go EXC's debt to equity ratio is quite good, free cash flow also quite strong. Debt in itself is not a bad thing, and an important part of growing a company. Utilities are historical capital intensive as they are constantly upgrading, expanding and servicing their production and grid. These historical low rates are a goldmine for utilities as they are able to lock in a large proportion of their capital needs for years to come. Companies that own dividend obligations, tend to make mgt more conservative and take a longer term view, less likely to overextend themselves, keep caught up in the frenzy of the moment that can quickly turn. Your arguments make ZERO sense in regards to EXC.
pjv195 you and I agree with EXC's potential but I am of the opinion the equity market is in for a major correction and EXC can be bought for a somewhat cheaper price in the future. You make a good point, and I could very well see EXC pull away from me to the upside. Just making a bet I suppose, that could go either way. I see a lot of dangers on the horizon that the market is ignoring at this point, top of my list is turmoil in Russia that will spill over to Europe. Also the Greece election results could mean Spain, Portugal, and Italy follow a similar path. Finally the currency war is in it's early stages with endless negative implications. My gut tells me the recent U.S. strength will prove short-lived as we eventually succumb to the growing global troubles. We shall see.
It is a fact, dividend paying stocks have outperformed non-dividend paying stocks over time. Which makes your statement rather ludicrous.
History has proven dividend paying stocks are an important part of enhancing long-term value. Your thoughts are rather misguided.
I never stated that raising the dividend of EXC would make the stock more attractive, I was simply responding to your belief that EXC possesses too much debt to support it's dividend. Not sure what the purpose of your original post was in regards to EXC? Not as if Germany is the sunbelt capital of the world.
EXC has operations throughout the United States including Texas, so EXC is in the Sunbelt. The future of the electric grid in my opinion is wind, solar and other green energy sources with nuclear providing the baseload. On both fronts EXC has large exposure and should benefit handsomely as this trend moves forward. EXC's debt is quite manageable compared to free cash flow. Also, EXC has taken advantage of recent historic low rates to lock in longer term debt and retire other more costly IOUs. No need to cut dividend, in fact I foresee EXC raising the dividend in the future.
Or will they instead continue to rake in their huge salaries and care less about shareholders?
What you fail to mention is Germany has a very strong coal lobby, hence the reason they are building new coal plants and mothballing nuclear. This makes absolutely zero sense considering the entire reason to go renewable is to avoid the pollution costs of sources like coal generated electricity. Can't get much dirtier than coal. Nuclear is the future of baseload capacity, not coal, and wind and solar cannot fill that role, especially in the United States. Carbon emissions will become more and more an issue in the coming years, EXC is positioned well to take advantage of this inevitability.
EXC is not your typical utility, it has many merchant utility qualities yet often trades like a highly regulated utility, especially if the utility index is falling due to rising interest rates. But this should not be the case because a merchant utility is not nearly as susceptible to rising rates as a regulated outfit because a stronger economy translates into higher demand for electricity, which means higher prices which benefits an outfit like EXC who sells their excess production on the open market to the highest bidder. Plus EXC's nuclear fleet produces zero carbon emissions, which will eventually benefit from some form of carbon tax in the future. EXC has been an underperformer for quite some, not only compared to the overall market but compared to the utility sector as a whole, which is vexing. I would think eventually EXC deserves a market multiple of a least 16, which is still below the S&P 500 average. That places EXC stock near 40, and this assume EPS does not grow in the coming years. If interest rates continue to push higher in the coming months I suspect EXC will take a ride down with the rest of the sector, but in my opinion this would represent a golden opportunity to buy because EXC is not your typical utility for the reasons I stated above.
If the downtrend in interest rates is truly over and the curve normalizes, EXC stock could easily test the $31 level. Based on all the turmoil worldwide, the huge amounts of debt globally, deflationary pressures, et cetera I can't see that happening. I am a buyer of EXC low 34s. Current price a bit too rich for me.
This has to be one of the largest scandals in stock market history perpetrated by AZN Mgt.
You made the same moronic post 5 months ago Finster with BTU trading $13.80. Down 50%!!!! Have you no shame? We all know you own a very selective memory. How bout that dividend cut? You posted not long ago BTU's dividend was safe, in fact you claimed there would be a dividend increase. The joke is on you or anyone who is foolish enough to employ your highly misguided advice.
I would use any rallies to reduce equity exposure. These huge daily swings are not a good sign. Look for the S&P 500 to correct at least 10% in the coming months. BTU will most likely hold up better than most stocks since it has already been absolutely pummeled but that is not to say it will not go down further.
Finster, it has become quite apparent anytime you formulate an opinion, utilize your famously inept inductive/deductive reasoning skills, the conclusion you draw proves to be painfully WRONG!
If the reserve currency begins to deflate in this environment then welcome to complete chaos and anarchy then as you point out, guns and ammo will be a precious commodity (throw in can goods also). As far as BTU pulling off a small gain in a seriously down market, I wouldn't read too much into that. It is not unusual for stocks that have been beaten to a pulp to see short-term counter uptrends as equities that have participated in the bull market sell-off.
I see 1990 on the S&P 500 as the key support level, if we break, clear sailing down to 1870. And based on the way the money center bank stocks have been acting of late I think this time the markets finally do capitulate (Flattening yield curve very bad news for banks). Now throw in the currency war, the Middle East and Russia unraveling, Europe falling into recession, the Euro collapsing, the property bubble in China unraveling, Abenomics failing in Japan, commodity debacle killing the emerging markets, the huge debt load worldwide...Well you tell me where the bottom is?