Historically, ITC has been a short target, in part because of the fact that energy infrastructure is a costly business to upkeep. Even though there's still plenty of short interest, the weak-handed bets have already been shaken out of shares.
ITC has big net margins, in part because of its business structure. The firm charges tariffs to power companies for the privileges of using its network. Any given quarter, barring any big one-time capital expenditures, a big chunk of those tariffs gets passed directly onto ITC's bottom line.Another result is cash. Last year, the firm generated more than $380 million from its operations, well above the level ITC needs to pay off debt and dividends. Utilities have traditionally been a bastion of safety for income investors, and even though ITC's business is different than a run of the mill regulated utility, its payouts are no different. I'm expecting a dividend hike in the next quarter. To see these dividend plays in action, check out the Potential Dividend Hikes portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore. Follow Stockpickr on Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV