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A Wall Street Transcript Interview with Edward Jones Research "Best on the Street" Utilities Analyst Andy Pusateri: Asset Quality Becomes Key for Utilities as Regulatory Relations Cool

67 WALL STREET, New York - February 17, 2014 - The Wall Street Transcript has just published its Alternative Energy & Utilities 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 - Solar Energy Pricing - Government Subsidies and Regulation - Solar Growth Drivers and Headwinds - Regulatory Headwinds for U.S. Utilities

Companies include: ITC Holdings Corp. (ITC), Dominion Resources, Inc. (D), American Water Works Company, (AWK), Southern Company (SO), Integrys Energy Group, Inc. (TEG) and many others.

In the following excerpt from the Alternative Energy & Utilities Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Can you begin with a brief introduction to your coverage universe, including some of the specific names you cover?

Mr. Pusateri: I cover 16 utilities right now, so I am one of two utility analysts in our department. The other utility analyst tends to focus a little bit more on gas utilities. We kind of share the exposure to electric utilities, and I have a little bit more coverage when it comes to utilities with pipeline ownership or exposure to MLPs, and I guess I also cover the water utilities. We only cover two water utilities right now due to our coverage criteria screening here, but I'd cover both of those.

TWST: You cover a few different kinds of utilities. About which area within utilities are you most bullish right now and why?

Mr. Pusateri: I think right now I prefer the utilities that have some exposure to the energy sector, the midstream sector, because in general I prefer companies that are higher growth and lower yield. And when I say growth, I mean earnings growth as well as dividend growth. I just think those can hold up better in a rising interest rate environment.

In addition to that I think that utilities have done well, although they weren't a high performer in 2013. I think if you go back over a couple of years in a low interest rate environment, we have seen a lot of investors really chasing high yield, and I think utilities have benefited from that, and many utilities are trading at all or near all-time highs. And I think that there is still an opportunity for part of the energy sector that seems more attractively valued. So I prefer utilities with exposure to those pipeline assets and exposure to the MLP structure.

I also think the market is willing to apply premium multiples to companies that have exposure to MLP assets due to the fact that they are going to be higher growers compared to your traditional utility company. I would say that within the traditional utility framework, I probably prefer the water utilities to the electric utilities right now...

For more of 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.