There are so many utility companies to choose from that sometimes it is difficult to pick one or two to own shares in. I guess I have not had that problem, since I feel that Exelon (EXC) will lead the way for me within my retirement portfolio for a very long time. Not unlike ExxonMobil (XOM), Exelon has itself positioned extremely well in all areas of energy, and as a major utility company it will soon service a wider area of residential users as well as business users.
The successful merger with Constellation (CEG) is just a few pen strokes away from being finalized, and will be accretive almost immediately. The decline in natural gas futures will not offset the additional revenues from its nuclear facilities, and I believe that Exelon is positioned well enough in every sector that when prices rise in natural gas, it will be more icing on the cake.
Even with some of those wonderful downgrades lately, it seems that I am not the only one who believes that EXC will offer positive capital appreciation (read this report from TheStreet.com). Now add to it that really sweet dividend of 5.20%, and we have all the ingredients required to enhance any portfolio with EXC as a core holding.
Some Basic Fundamentals for Exelon
- Price: $41.09/share
- Dividend Yield: 5.20%
- ESS Rating: Bullish
In mid 2008, the share price touched $80, and since that time it has basically flatlined and underperformed. From my standpoint we have a buying opportunity right now, and have a 5.2% dividend to help us wait for everything to click.
My Opinion
I am a firm believer in EXC and its future potential growth for shareholders. Nuclear is not going away, and every part of Exelon's business is strong as well. The opportunity to own it at these prices make it a very attractive core holding for retirees and even adding some shares at these levels could enhance any portfolio.
Obviously I own it already, and love the dividends as well as the call premiums. I am a happy camper.
Disclosure: I am long EXC, XOM.
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