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

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3. Avista Corp.

Fitch highlights Avista Corp (AVA - Get Report) as a potential regulated utility takeover target. Currently, the company carries a market cap of $1.46 billion and a dividend yield of 4.39%.

The Spokane, W.A -based utility has electricity generation, transmission and distribution operations through its Avista Utilities unit, which also distributes natural gas. The company also has a 76% stake in Ecova, an energy expense management service company that operates throughout the U.S. Ecova's main businesses is helping utilities and telecoms manage leasing arrangements, in addition to tracking energy and water use.

Founded in 1889 as the Washington Water Power Company, Avista got its present name through a 1998 name change.

Avista's utility serves customers with a mix of hydro, natural gas, coal and biomass generation that is delivered via over 2,100 miles of transmission lines and 17,000 miles of distribution lines to roughly half a million customers.

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

The company is expected to earn 45 cents a share when it reports fourth quarter earnings on Feb. 15, according to Zacks consensus estimates. Avista is expected to have revenue of $1.6 billion and net profits of $101 million in 2011, according to Bloomberg consensus estimates. In 2012, those sales and profit numbers are expected to $1.71 billion, but profits will rise to $105 million.

Analysts give Avista an average price target of $24.90 a share, a discount to the company's current share price of $25.28. For more on Avista shares, see TheStreet's portfolio of the highest yielding electric utility stocks.

In 2011, the company's shares gained over 14%, in line with overall sector returns. Bernstein analyst Hugh Wynne highlighted Avista as a potential takeover candidate because of its low valuation, in an Oct. 2011 research note.

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