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

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8. Westar Energy

Fitch sees regulated utility Westar Energy (WR - Get Report) as a potential takeover candidate in 2012 and beyond. The company currently has a market cap of $3.33 billion and a dividend yield of 4.51%.

Westar Energy is a Kansas passed public utility that has a vertical operation of electricity generation, transmission and distribution to roughly 687,000 customers in the state. While Westar Energy serves cities like Topeka, Lawrence, Manhattan, Salina and Hutchinson, K.S., it's Kansas Gas and Electric subsidiary serves south central and southeastern Kansas. The company's customers are split with roughly 369,000 being served by Westar, while 318,000 are served by KGE.

In 2011, Westar Energy slightly underperformed the sector index, posting an over 12% annual gain.

Fitch notes that the company operates in one regulatory jurisdiction.

The company is expected to earn 16 cents a share when it reports fourth quarter earnings on Feb. 23, according to Zacks consensus estimates. Westar Energy is expected to have revenue of $2.1 billion and net profits of $217.4 million in 2011, according to Bloomberg consensus estimates. In 2012, those sales and profit numbers are expected to rise to $2.2 billion and $244 million, respectively.

Analysts give Westar Energy an average price target of $29.17 a share, a 3% premium premium to the company's current share price of $28.40. For more on Westar Energy's shares, see 8 high dividend utility stocks to watch.

Goldman Sachs analysts estimates Westar Energy will have a compounded annual dividend growth rate of 3% from 2010 through 2013, one of the 10 highest growth rates in its sector coverage.

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