Utilities have been busy this week, making moves to maximize profit potential. With insider stock sales, natural gas rate requests, nuclear shutdowns, and more, here's what you need to know to stay on top of your dividend stocks' latest moves.
Is Aqua dried up?
Aqua America (NYSE: WTR ) announced this week that Chairman, President, and CEO Nicholas DeBenedictis recently sold around $3 million worth of shares. Management stock sales usually make Wall Street worry that the top dogs know something Mr. Market doesn't. If corporate executives sell stock, they may believe their company is overvalued -- or they may know there's trouble ahead.
In this case, Aqua's press release was meant to dispel any such rumors. DeBenedicitis and his wife still own around $24 million in shares, and this week's options exercise was made primarily for "personal long-term financial planning reasons."
Top 5 Dividend Companies To Own In Right Now: DTE Energy Company(DTE)
DTE Energy Company, together with its subsidiaries, operates as an electric and natural gas utility company in Michigan. It also involves in non-utility operations. The company?s Energy Utility segment engages in the generation, purchase, distribution, and sale of electricity in southeastern Michigan. It generates electricity from various fuels, including coal, as well as from nuclear and hydro facilitates. As of December 31, 2010, this segment owned and operated approximately 674 distribution substations and approximately 412,100 line transformers; and supplied electricity to 2.1 million residential, commercial, and industrial customers in southeastern Michigan. The company?s Gas Utility segment engages in the purchase, storage, transmission, distribution, and sale of natural gas in Michigan. As of December 31, 2010, this segment?s distribution system included approximately 19,000 miles of distribution mains, 1,036,000 service lines, and 1,319,000 active meters. It also o wned approximately 2,000 miles of transmission lines that deliver natural gas; and supplied natural gas to approximately 1.2 million residential, commercial, and industrial customers throughout Michigan, as well as to approximately 17,000 customers in Adrian, Michigan. The company?s non-utility operations include natural gas pipelines and storage; unconventional gas exploration, development, and production; power and industrial projects, and coal transportation and marketing; and energy marketing and trading operations. Its customers include electric utilities, merchant power producers, integrated steel mills, and industrial companies. DTE Energy Company was founded in 1995 and is based in Detroit, Michigan.
Advisors' Opinion:- [By Martin]
Deutsche Telekom AG is a diversified telecommunications & Information technology company operating in 5 areas: Germany, the United States, Europe, Southern and Eastern Europe. The company has a solid strategy in place to become the largest 4G network in the United States, increase its annual revenue to $3 billion by 2014 & increase its profit margins while decreasing churn. Currently, the company's stock trades at almost 19 times earnings and sports a nice 6.52% dividend yield. The company has a market cap of almost $43 billion and it trades on the Frankfurt stock exchange. For the 3rd quarter of 2010, the company generated Euro 4.8 billion of free cash flow from which Euro 4 billion was paid in dividends. While this represents a high payout ratio, most companies in the telecommunications sector are known to pay a large portion of their cash to shareholders as dividends, in a bid to increase shareholder value.
Top 5 Dividend Companies To Own In Right Now: Northeast Utilities(NU)
Northeast Utilities, a public utility holding company, provides electric and natural gas energy delivery services to residential, commercial, and industrial customers in Connecticut, New Hampshire, and western Massachusetts. The company engages in the purchase, delivery, and sale of electricity; and owns and operates approximately 1,200 megawatts of primarily fossil-fueled electricity generation assets. As of December 31, 2010, it served approximately 1.2 million customers in 149 cities and towns in Connecticut; 497,000 retail customers in 211 cities and towns in New Hampshire; and 206,000 retail customers in 59 cities and towns in western Massachusetts. The company also operates a natural gas distribution system in Connecticut and serves approximately 206,000 customers in 71 cities and towns. It offers gas supply to commercial and industrial customers; and to residential customers for heating, hot water, and cooking needs, as well as provides gas transportation services t o commercial and industrial customers. In addition, the company offers electric transmission services. Northeast Utilities was founded in 1927 and is headquartered in Hartford, Connecticut.
Hot Low Price Companies To Watch For 2014: Kraft Foods Inc.(KFT)
Kraft Foods Inc., together with its subsidiaries, manufactures and markets packaged food products worldwide. The company offers biscuits, including cookies, crackers, and salted snacks; confectionery products, such as chocolate, gum, and candy; beverages comprising coffee, packaged juice drinks, and powdered beverages; cheese products, including natural, processed, and cream cheeses; grocery items consisting of spoonable and pourable dressings, condiments, and desserts; and convenient meals, which comprise processed meats, packaged dinners, and lunch combinations. Its primary brand portfolio includes Oreo, Nabisco, and LU branded biscuits; Milka and Cadbury branded chocolates; Trident branded gum; Jacobs and Maxwell House branded coffees; Philadelphia branded cream cheeses; Kraft branded cheeses, dinners, and dressings; and Oscar Mayer branded meats. The company sells it products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributor s, convenience stores, gasoline stations, drug stores, value stores, and retail food stores. Kraft Foods Inc. was founded in 2000 and is based in Northfield, Illinois.
Advisors' Opinion:- [By JON C. OGG]
Kraft Foods Inc. (NYSE: KFT) recently closed at $34.87 and the analyst community’s price target objective is $37.69. The dividend yield is 3.3% and the stock is down only 3.9% from its 52-week high. The price to book value is 1.5 and its return on equity is 8.5%.S&P has a local long-term rating of “BBB” and a stable outlook despite the recent proposed break-up. The break-up here is only adding value to holders in what was becoming a very dead-money stock for investors. Its Cadbury deal added leverage and Warren Buffett had backed off his holdings on that ac quisition.
Top 5 Dividend Companies To Own In Right Now: Alliance Resource Partners L.P.(ARLP)
Alliance Resource Partners, L.P. engages in the production and marketing of coal for utilities and industrial users in the United States. It operates nine underground mining complexes, which offer low, medium, and high-sulfur coal. The company also leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and purchases and resells coal. In addition, the company provides mine products and services comprising design and installation of underground mine hoists for transporting employees and materials in and out of mines; design of systems for automating and controlling various aspects of industrial and mining environments; and design and sale of mine safety equipment, such as its miner and equipment tracking, and proximity detection systems. Further, it offers ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. As of December 31, 2010, the company had approximately 697.4 million tons of coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. Alliance Resource Management GP, LLC serves as the general partner of Alliance Resource Partners, L.P. The company was founded in 1971 and is based in Tulsa, Oklahoma.
Advisors' Opinion:- [By Holly LaFon] Alliance Resources Partners is a coal producer and marketer primarily in the eastern U.S. Its ROA has been increasing since 2008 and increased to 22.5% in 2011 from 21.4% in 2010. The average return on assets for the oil, gas & consumable fuels industry in the trailing 12 months is 24.47%.
In 2011, its total assets increased to $1.7 billion from $1.1 billion in 2010. Its net income increased to $389 million from $321 million. - [By Bill]
Coal is also an attractive investment to protect investors against runaway inflation. Industrial use of coal is particularly quite high. Flexible electricity producers switch between coal and other energy sources and this causes a high correlation in prices. The price of coal also collapsed from $200 per ton to $60 per ton during the financial crisis. The current level of $120 is 40% lower than its peak price. ARLP is a very profitable company, and it will benefit from the rise in coal prices. Current P/E ratio of 10 and dividend yield of 5% suggests ARLP is a very good buy.
Top 5 Dividend Companies To Own In Right Now: Paragon Shipping Inc.(PRGN)
Paragon Shipping Inc. provides shipping transportation services worldwide. The company engages in the ocean transportation of various drybulk cargoes and containers. Its fleet consists of 11 drybulk vessels with a total carrying capacity of 747,994 dwt. The company was founded in 2006 and is based in Voula, Greece.
Advisors' Opinion:- [By Roberto Pedone]
Another under-$10 name shipping player that's starting to move within range of triggering a big breakout trade is Paragon Shipping (PRGN), which is engaged in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials along shipping routes worldwide. This stock has been on fire so far in 2013, with shares up sharply by 114%.
If you take a look at the chart for Paragon Shipping, you'll notice that this stock just recently took out its 50-day moving average of $4.19 a share with strong upside volume. Shares of PRGN are showing relative strength today, despite the overall market weakness, which shows this stock is in strong demand at current levels. This move is now starting to push shares of PRGN within range of triggering a big breakout trade
Market players should now look for long-biased trades in PRGN if it manages to break out above some near-term overhead resistance at $4.90 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 25,811 shares. If that breakout triggers soon, then PRGN will set up to re-test or possibly take out its 52-week high at $5.70 a share. If that level gets taken out with volume, then PRGN could easily tag its next major overhead resistance levels at $7 to $8.35 a share.
Traders can look to buy PRGN off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $4.19 a share, or below its 200-day moving average at $3.74 a share. One can also buy PRGN off strength once it clears $4.90 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point. I would add to either position once PRGN takes out its 52-week high at $5.70 a share with strong upside volume flows.
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