IDACORP Inc (IDA), NextEra Energy, Inc. (NEE), Cleco Corporation (CNL): Will These Power Companies Charge Your Portfolio?

However, nothing’s perfect. NextEra Energy, Inc. (NYSE:NEE) is trading at around 20 times its earnings, and that’s a bit pricey. In addition, being part of the Fortune 200 makes NextEra well known to mutual fund managers and thus a holding with a lot of takers. If a mutual fund manager ever wants to appear more “active,” buying and/or selling a few hundred thousand shares could put the share price in knots. Other than that admittedly small risk, I don’t see anything to keep you from taking a good look at NextEra Energy, Inc. (NYSE:NEE) and possibly buying it on its next dip.

Cleco Corporation (NYSE:CNL) is interesting because it has both regulated and unregulated energy businesses. In 2010, Cleco Corporation (NYSE:CNL)opened a facility that uses waste refinery coke among its other solid fuel sources, which takes advantage of the number of refinery operations there are in Louisiana. Cleco Corporation (NYSE: CNL) is great because it’s pulling 15.9% profit margins and trading for around 17 times earnings, which gives it the money to invest into expanding and a fairly reasonable price if you’re thinking of buying in.

However, there is a price to pay for being reasonably inexpensive. Using solid fuels, particularly those involving refinery-waste products, tends to be a pretty dirty affair. While the other two companies we discussed above are pretty green, Cleco Corporation (NYSE:CNL) is a good deal that’s less green. The 3% dividend could end up being cut if new regulations require cleaner standards, and sooner or later such regulations will probably be reality. Your mileage may vary, but I personally would hold off on buying Cleco unless it were trading at a very low price.

The Foolish bottom line

There are deals to be had in power utilities. This is particularly the case when the company is throwing off plenty of profit and can expand as it wants. The real bonus points happens when the company has an eye to the future and is taking proactive steps today.

The article Will These Power Companies Charge Your Portfolio? originally appeared on Fool.com and is written by Chris Hodge.

Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.