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


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7. Great Plains Energy

Fitch rates Great Plains Energy (GPX) with a $2.81 billion market cap and a 4.11% dividend yield.

Great Plains Energy is the holding company for Midwestern utilities Kansas City Power & Light and KCP&L Greater Missouri Operations Company, which combined serve over 800,000 customers in 47 Missouri and Kansas counties. The company's vertical operations generate 6,100 megawatt of electricity generation that are transmitted and sold in the region. From 2005 to 2010, the company embarked on a strategy to increase its energy generation and transmission by refurbishing existing facilities.

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

The company is expected to earn 2 cents a share when it reports fourth quarter earnings on Feb. 27, according to Zacks consensus estimates. Great Plains Energy is expected to have revenue of $2.3 billion and net profits of $188 million in 2011, according to Bloomberg consensus estimates. In 2012, those sales and profit numbers are expected to rise to $2.4 billion and $230 million, respectively.

Analysts give Great Plains Energy an average price target of $22.7 a share, an over 10% premium to the company's current share price of $20.67. For more on Great Plains Energy shares, see TheStreet Rating's portfolio of the highest yielding electrical utility stocks.

The company's shares gained 12.35% in 2011, slightly underperforming the sector index. Nevertheless, Goldman Sachs analysts highlight Great Plains Energy as one of its regulated utility stock recommendations because it trades at stock prices below its peers and historical earnings multiples on its expected 2013 earnings.

The firm also estimates Great Plains 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.

Great Plains Energy Incorporated and Kansas City Power & Light also cut a high speed fiber optic internet service with Google (GOOG) in May, making it the first investor-owned utility to partner with the Mountain View, Calif., based tech titan on its Google Fiber initiative.

In 2007, Great Plains Energy bought Aquila, a struggling Kansas-based utility for $1.7 billion in a cash and stock deal, gaining an added foothold in Midwestern states.

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