It takes some doing to supply energy to one of the world’s most dynamic cities for 180 years, but that is exactly what Consolidated Edison (ED) has been doing. Income seeking investors might want to take a closer look at this counter for their portfolios.
Trading on a dividend yield of 4.8% and a historic price to earnings multiple of 14.6 times historical earnings, ConEd (ED) provides a variety of energy related services to New York city as well as New Jersey and Pennsylvania.
With approximately $13bn in annual revenues and $34bn in assets, ConEd (ED) is one of the world’s largest investor owned utility businesses. Services that the company delivers include electricity to the bustling hub of New York City and natural gas service in Manhattan, the Bronx, and parts of Queens and Westchester. The company also owns and operates the world’s largest district steam system, providing steam service in most of Manhattan.
The company has increased dividends for 36 consecutive years, a fact shareholders will welcome considering the boom and bust cycles of the last 4 decades.
Reporting second quarter results in August, the company delivered net income for the second quarter of 2010 of $183m or $0.65 a share compared with $150m or $0.55 a share in 2009. Earnings from ongoing operations were $144m or $0.51 a share in the second quarter of 2010 compared with $131m or $0.48 a share in 2009. The second quarter results reflect cost control at the utilities as well as stronger than forecasted performance at the competitive energy businesses.
The company also raised the earnings guidance for the year from between $3.10 - $3.30 to between $3.25 to $3.45 per share. The higher range reflects, among other things, stronger than forecast financial performance at Consolidated Edison Company of New York, Inc. (CECONY), reflecting primarily savings in certain operating expenses through cost control efforts and stronger than forecasted financial performance at the competitive energy businesses.
In previous columns we have mentioned two factors which dividend investors need to consider when considering a stock for their portfolio - brands and track records. New York City remains one of the most recognizable global brands and to have been able to keep energy flowing through the city for 180 years is no mean feat.
ConEd (ED) is definitely a stock to be considered if you like slow and steady utilities.
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