Along with that, MetLife recently disclosed its intention to purchase from Banco Bilbao Vizcaya Argentaria SA (BBVA) its pension fund Administrator AFP Provida SA in Chile. Although the companies have not reached any agreement about this deal, MetLife has set a target of ~12% ROE from the emerging economies, including Chile. With the increased focus on Insurance and its other core businesses and the expected buyback in the next quarter, I feel that MetLife’s stock will grow. It’s a Buy for me.
Duke Energy
2012 was not an ideal year for utility companies in the US, as electric output was down ~1.2%, even though heating degree days were up by ~4% Y/Y. It has been a tough year for Duke as well. It faced major regulatory hurdles with respect to its acquisition of Progress Energy in mid-2012 and the Edwardsport Settlement. But Duke has managed to bring down its regulatory risks, and all the issues involving the company with the North Carolina Utilities Commission (NCUC) regarding the acquisition of Progress Energy have been resolved. Along with that, the Indiana Utility Regulatory Commission has approved the Edwardsport Settlement case, which was filed by Duke and several others with some modifications. The recovery cost of the 618 MW IGCC (“clean coal”) plant in Edwardsport has been raised to ~$2.6 billion from the previous ~$1.98 billion. The plant will be operational by mid-2013.
With the regulatory settlements behind them, I believe that Duke Energy is ready to deliver good results. Anticipating the limitations of traditional ways of generating energy, Duke has shown its interest in renewable energy sources. In the past 5 years it has invested more than ~$2.5 billion in renewable energy and is expected to keep on increasing the same in the future. It recently acquired two hydro plants in Chile from the CGE Group with aggregate capacity of 140 MWs for ~$415mm. Along with that, its two wind power projects in Texas are also complete, which will deliver ~402 MW of energy. Though the company’s short term outlook is influenced by the weak condition of the utility industry, its long term position seems strong. Hence, the stock is a buy.
Conclusion
Summing up, I don’t think the increment in stores worldwide will be enough for Coach to overcome the weak North American sales, a fluctuating Yen, and the increasing competition. Coach’s stock seems to be weak in the near future. On the other hand, the selling off of its deposits and the expected ROE will help MetLife’s stock to grow. As far as Duke Energy is concerned, it is known for declaring a dividend each quarter. It has not missed even a single quarter in the last 86 years. I feel that its renewable energy ventures will help maintain the streak for many more to come.
The article 2 Stocks From Lombardia You Must Buy originally appeared on Fool.com and is written by Shweta Dubey.
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