4-Star Stocks Poised to Pop: FirstEnergy
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, utility giant FirstEnergy (NYS: FE) has earned a respected four-star ranking.
With that in mind, let's take a closer look at FirstEnergy's business and see what CAPS investors are saying about the stock right now.
FirstEnergy facts
Headquarters (founded) | Akron, Ohio (1996) |
Market Cap | $18.8 billion |
Industry | Electric utilities |
Trailing-12-Month Revenue | $15.8 billion |
Management | CEO Anthony Alexander (since 2004) |
Return on Equity (average, past 3 years) | 8.7% |
Cash/Debt | $202.0 million / $17.3 billion |
Dividend Yield | 4.9% |
Competitors | American Electric Power |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 95% of the 384 members who have rated FirstEnergy believe the stock will outperform the S&P 500 going forward.
Late last month, one of those bulls, All-Star TMFDeej, explained why the company's recent decision to close six coal-fired power plants bodes well for shareholders:
FirstEnergy is the dominant electricity provider in large chunks of Ohio. Consumers have no choice but to buy power from them. A lower supply of power plants with a steady or perhaps slightly increasing demand for power if the economy continues to improve means higher power prices. Higher power prices are obviously a big plus for a utility, particularly at a time when low natural gas and coal prices are driving the price of electricity down. ...
Also, keep in mind that FirstEnergy is actually closing old, inefficient plants to get this increase in revenue not spending big bucks to build new ones.
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Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Dominion. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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