Top Ranked Utility Sector Analyst Picks the Most Likely Consolidation Candidates Based on Geography and Power Generation Profile

Wall Street Transcript

67 WALL STREET, New York - August 27, 2012 - The Wall Street Transcript has just published its Utilities, Alternative Energy and Water Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Outlook for Biofuels and Biochemicals - Asia Pacific Demand for Solar Energy - Grid Parity Timelines for Alternative Energy - Water Infrastructure Development - Irrigation and Metering Technology - Water Industry Consolidation

Companies include: PG & E Corp. (PCG), SCANA Corp. (SCG), Dominion Resources, Inc. (D), Duke Energy Corp. (DUK), Southern Company (SO), Northeast Utilities (NU), Exelon Corp. (EXC), NRG Energy, Inc. (NRG), CH Energy Group Inc. (CHG) and many others.

In the following excerpt from the Utilities, Alternative Energy and Water Services Report, All Star analyst Timothy Winter discusses the outlook for the sector:

TWST: In your electric outlook report, one of the factors you discussed is consolidation throughout the utility sector. What is your current outlook for M&A? And what kinds of deals are we likely to see?

Mr. Winter: The utility industry is going to continue to consolidate. One of the bigger drivers in the latest round of consolidation is that capex is higher, the investment required in infrastructure is higher than it's been in sometime, so by merging utilities create synergies. That's what drove the NU-NSTAR merger that we discussed. Duke and Progress merged in June 2012 as well because they have to address the environmental issues.

And then also, you see some of the higher-value deals this year, CH Energy Group (CHG), being acquired by Fortis (FTS.TO), which is a small distribution utility in the New York and central Vermont, but was acquired by Gaz Metro. The smaller utilities are going to continue to be consolidated into larger ones for economies of scale. As we move forward, you're going to see that continue.

There are still plenty of load, smaller market cap, midcap utilities that are underfollowed on the Street that have high-quality earnings growth, dividend growth. We like to find those opportunities and participate in the shareholder value accretion from earnings and dividend growth and the eventual consolidation of those companies into the bigger companies.

For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers, and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

View Comments (0)