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10 Dividend Rich, Deal Ready Utility Stocks Ready for a 2012 Jolt


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1. Empire District Electric

Fitch Ratings highlights sub-$1 billion regulated utility Empire District Electric (EDE) as a potential takeover target. The company has a market cap of $866.8 million and it currently has suspended its dividend.

Joplin, M.O -based Empire District Electric had to suspend its dividend in May after a category five leveled the city, killing 160 people and injuring nearly 1000 more, creating billions in damages.

The public utility generates, purchases, transmits, distributes and sells electricity in Missouri, Kansas, Oklahoma and Arkansas via its electricity and gas units. The 102 year old company serves nearly 170,000 electricity customers and an additional 44,487 gas customers.

Fitch notes that the company operates in four regulatory jurisdictions, all of which would have to approve any merger or takeover.

The company is expected to earn 20 cents a share when it reports fourth quarter earnings on Feb. 2, according to Zacks consensus estimates. Empire District Electric is expected to have revenue of $573 million and net profits of $57 million in 2011, according to Bloomberg consensus estimates. In 2012, those sales and profit numbers are expected to rise to $606 million and $58 million, respectively.

In May, the company suspended its 25 cent a share dividend for an expected two quarters. In 2010, the company paid out $1.28 in dividends, but has not yet announced a resumption.

Analysts give Empire District Electric an average price target of $22 a share, a 6.33% premium to the company's current share price of $20.69. For more on Empire District Electric's shares, see the portfolio of 8 high yield defensive stocks.

In 2011, the company's shares fell over 5%, recovering from a near 20% share drop in the days after the Joplin, M.O.-tornado.

In 2006, Empire acquired natural gas distribution rights from Aquila, expanding its Midwestern footprint.

-- Written by Antoine Gara in New York

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