This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Barclays' 5 Best Utilities Stocks for 2012

Stocks in this article: AEP NU NST OGE CPN AES

NEW YORK ( TheStreet) -- Barclays Capital published a report Jan. 3 titled "Go With the Flow." Daniel Ford, Gregg Orrill, Theodore W. Brooks, Ross A. Fowler, M. Beth Straka and Noah Hauser have identified their most preferred power and utilities stocks for investment in 2012.

Here are the five stocks Barclays Capital is bullish about.

American Electric Power (AEP) has been given an over-weight rating by Barclays Capital.

The company received a final judgment on its Ohio generation and distribution cases on Dec. 14, 2011.

The Ohio jurisdiction has substantial impact of 30% to 40% on American Electric Power's earnings, indicating a material future earnings growth.

Even though both cases were settled, the stock was still trading at a 12% discount through the day of the ruling two weeks ago.

However in the two weeks after the ruling, the stock outperformed the regulated group by 1.1% -- up by 7.6% vs. the 6.5% regulated group increase. Barclays Capital expects the outperformance to continue in 2012.

Moreover, American Electric Power, along with other partners, announced a plan to build a gas pipeline in Ohio for the purpose of transporting Utica shale gas to the Eastern marketplace.

Barclays Capital believes that American Electric Power will earn $3.10, $3.17 and $3.28 in 2011, 2012 and 2013, respectively.

Although the stock has performed well recently, it still trades at an 11% discount to its peers. This is despite the new earnings visibility and a 4.5% yield indicating a 10% premium to the average dividend yield for regulated utilities.

Barclays Capital has given a price target of $45 per share, indicating a regulated group utility multiple of 13.3 times Barclays' 2013 EPS estimate of $3.28, plus $1/share of cash. Jim Simons' Renaissance Technologies had the largest stake in AEP among the 350-plus hedge funds we are tracking.

Northeast Utilities (NU)/ NSTAR (NST) has been given an over-weight rating by Barclays Capital.

In the view of Barclays Capital, once the company's merger with NSTAR is finalized, it should create one of the best-positioned large-cap regulated utilities in Barclays Capital's coverage universe.

RELATED STORIES:


1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,863.94 +85.79 0.48%
S&P 500 2,075.02 +13.79 0.67%
NASDAQ 4,775.3820 +26.9860 0.57%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs