more DUK info.......
after reading this, i am prolly doing to keep DUK on the radar and look for another "conservative" stock. seems that the internal multiples are not that strong....and really should be better in this cycle of the market. This run of the "utes" should really be nirvana: expanding multiples and solid price improvement.
from briefing's files.
05-Jul-05
06:42 Energy stocks trade at rich valuations - Barron's
According to the Barron's, risk-averse, yield hungry investors have put charge into utility stocks, pushing them up some 40% in the past year. But, Barron's writes, they may be in for a shock. "The plain-vanilla utilities don't have a favorable risk-reward" ratio, says David King, manager of the Putnam New Value Fund. "People could be surprised at the downside in these stocks," particularly if the economy strengthens, pushing up interest rates and sending investors scrambling back into economically sensitive issues. Once prized as defensive redoubts in rocky markets because of their modest valuations, the average electric utility now trades for more than 16x projected 2005 profits, in line with the S&P's 500. So the P/E of utilities relative to the S&P 500 stands around 100%, the highest it has been over the past 20 years. The average has been 70%. Utilities also look rich vs consumer stocks. King sees better value in some big financial stocks, as well as traditional growth co's. Co's mentioned in the article include Exelon (EXC), Duke Energy (DUK), Southern (SO), Dominion Resources (D), TXU (TXU) and FPL (FPL).
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