On average, the previous 17 corrections in “Utility Sector’s Post-War Swoons” ended after roughly 14 months and involved a decline of 23 percent, excluding dividends paid. What does that mean for today?
Consolidation continues apace in the utility sector, as operators seek to take advantage of frothy stock prices to improve their economies of scale and increase their exposure to growing demand for natural gas.
We update our takes on the various pending acquisitions involving the more than 200 essential-services stocks that we cover in our Utility Report Card.
Last month, Barron's published a sensationalist article warning of a looming death spiral for US electric utilities and traditional power generators. Although stretched valuations may mean that utility stocks are overdue for a pullback in the near term, the sector's future prospects remain undiminished.
Although Exelon could be forgiven for swearing off future deals after enduring a painfully drawn-out approval process for its acquisition of Pepco, the management team has expressed an appetite for another merger. If the company completed due diligence on an alternative acquisition, a follow-up deal could come sooner than you might expect.
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