Consolidated Edison, Inc. (ED): A Utility For The Long Haul?

Good For The Long Haul Or Not?
If you are looking for a top utility to buy, I would suggest that Southern Co. is one of the better values. The company had a higher operating margin than their competition over the last year. Southern Co. also carries one of the highest dividends of the group, with the second highest growth rate. If you want a turnaround opportunity, I would take a look at Integrys. The company’s operating margin shows room for significant improvement. When you add potential margin improvement to the highest yield, and best projected growth rate, you get what could be a strong performer.

When it comes to Duke Energy, I have trouble with the company’s cash flow. Not only did they report negative cash flow last year, but that struggle continued into this year. The company neither has the highest yield, nor the fastest growth rate. The merger with Progressive could pay off in the end, but that remains to be seen.

Consolidated Edison by comparison looks like a decent value. The company showed growth across all types of fuel in the current quarter, and their operating margin has been fairly consistent. The company’s 39^th consecutive dividend increase shows that management has faith in the company’s future cash flows as well. When considering that Consolidated Edison was one of only two companies to produce a reasonable free cash flow payout ratio last year, there is a lot to like about the company. They may not be the best in all areas, but Consolidated Edison looks like a good utility for the long haul.

The article A Utility For The Long Haul? originally appeared on Fool.com and is written by Chad Henage.

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