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What's Going on With Exelon?

EXC saw revenue growth in its last reported quarter surge by 32.4%, no small feat. Its total cash was only $1.35 billion as of June 30, but its operating cash flow, a very important number, was a healthy $6.57 billion and rising.

Here's a chart showing the four-year history of Exelon's share price compared to its revenue per share.

EXC Chart EXC data by YCharts

Looks like both have bottomed and are moving up.

For comparison sake I looked at the key financial statistics for another big utility, Southern Company (SO). To me its balance sheet looked worse than Exelon's, with a higher debt-to-equity ratio of almost 115. Ouch!

Southern's yield to its current price of $45.92 was only 4.27%. Its quarterly revenue growth was not growing at all, but was actually a minus 7.5%. This helped me feel much better about EXC, whose earnings and revenue growing potential has not yet been realized.

If you're looking for another company with a decent dividend yield that appears to be seriously underpriced, take a look at Caterpillar (CAT - Get Report). With a forward PE ratio of less than 9 and a price-to-earnings-to growth (PEG) ratio of only 0.52, CAT looks more like a steal at $90 a share.

The demand for CAT's products and machinery should be growing in the year ahead now that the world's central banks have opened wide the money spigots and gone all-out to spur industrial growth and job-creating infrastructure and mining projects.

With its $2.08 annual dividend, if you can buy CAT shares at $90 your dividend yield would be 2.31%. That's better than the 10-year Treasury bond!

But if you'd prefer an almost 6% yield and ownership in one of the fastest-growing power companies in America, you may want to start accumulating shares of Exelon before the rest of the yield-hungry investment market catches on.

As of the time of publication the author had no holdings in any of the companies mentioned in this article.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.
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