Three Utilities for Selective Shoppers, Three High Yield Ideas

Earlier this week, utility titans Duke Energy (DUK) and Progress Energy (PGN) announced a merger that will create the nation’s largest regulated, electric utility with nearly $37 billion in market capitalization serving over 7 million customers across six states. Did the market do back flips? Was there a ticker tape parade? After all, big M and A activity is a positive sign that things are getting better. So what happened? Basically, the market yawned and scratched itself unenthusiastically.Maybe it was the premium or the lack thereof. In the stock for stock deal, PGN shares are valued at around 46.00 which comes to a lavish, 4% premium at best. Maybe if they had chosen the name “Groupon Energy” the offer might have been a little richer. However, if you pay attention to utility stocks even marginally, the tepid reaction shouldn’t be much of a surprise. In fact, the market has been treating the utilities this way since 2009.... Read more