Thanksgiving has come and gone and many of the rites of the holiday season are upon us: the crisp air, the first snow, and the sound of suburbanites everywhere cursing to high heaven while they try to hang their holiday lights. As many a homeowner prepares to venture forth into the bitter cold to engage in the annual rites of risking life and limb on an icy rooftop all in the name of holiday excess, it may be the season to consider where the source of the electricity powering these ostentatious displays is coming from. In a year where the S&P 500 Electric Utilities sub-industry index has risen almost 5.5 percent so far despite a mid-November plunge, four major electric utilities stand out as being poised for a very merry Christmas as their shareholder value has increased more than 20 percent year-to-date.
Dominion Resources, Inc. (D)
Dominion Resources is a utility company that supplies electricity to parts of Virginia and North Carolina while also providing natural gas for portions of West Virginia, Ohio, Pennsylvania, and eastern North Carolina. Dominion is a company almost as old as the country, tracing its roots back to dams built for industrial use along the Appomattox River in 1795. Now, Dominion has assets of 27,000 megawatts of power generation, 11,000 miles of natural gas transmission, and a market cap of over $28.5 billion. Dominion has been a good stock this year, with a price-adjusted performance year-to-date of over 21 percent.
FirstEnergy Corp. (FE)
FirstEnergy is an Ohio-based utility that controls over 23,000 megawatts of capacity through its subsidiaries and its distribution lines span over 194,000 miles. Servicing 6 million customers within a 67,000-square-mile region covering portions of Ohio, Pennsylvania, West Virginia, Virginia, Maryland, and New Jersey, FirstEnergy has a market cap of almost $18 billion. FirstEnergy was formed in 1997 when Ohio Edison Company and its subsidiaries merged with Centerior Energy Corp. and its subsidiaries. FirstEnergy has been making concerted efforts to produce cleaner, more carbon-conscious energy, showing significantly lower pollution than its regional competitors in a University of Massachusetts study. The company is almost as kind to the earth as it is its share-holders, offering a dividend yield of 5.15 precent for a price-adjusted performance increase of over 21.5 percent since January.
Progress Energy, Inc. (PGN)
Progress Energy has been having a monster year, offering a 4.76 percent dividend yield to shareholders while still managing to increase share prices by nearly 20 percent since the start of 2011. Featuring capacity of more than 21,000 megawatts and serving about 3.1 million customers, the Raleigh, NC-based energy producer services a region that stretches across both Carolinas and Florida. Progress also boasts a strong environmental record, having been named to the Corporate Responsibility Officer's list of 100 best corporate citizens in 2008 and making the Dow Jones Sustainability Index for the years 2005-9. In January, Duke Energy (DUK), the nation's third largest electricity provider, announced plans to merge with Progress, the nation's eighth largest electric company, to create a mega-utility that would service some 7.1 million consumers and become the largest electric utility in the country. Progress, meanwhile, has a price-adjusted performance of over 26 percent, buoyed by its healthy dividend.
Constellation Energy Group, Inc. (CEG)
Finally, the merriest Christmas of all may be coming for shareholders of Baltimore, MD-based Constellation Energy. Constellation is the smallest of these four companies, with a market capitalization just shy of $8 billion, but it's also featured the strongest investor returns of over 29 percent so far this year. Constellation is on the verge of being purchased by Exelon (EXC), a major diversified utilities corporation with a market cap of over $28 billion. Plans for the deal were announced in April.
'Tis the Season
As homeowners everywhere begin hanging their Christmas lights for the holiday season to come, there are plenty of electric companies that might expect to see demand tick up that much more in December. If half the home-owners out there feature as much wattage as Clark Griswold, it's safe to say that these four companies will see many, many more happy returns this Christmas.
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