Calpine Corp (CPN): Today's Featured Utilities Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Calpine ( CPN) pushed the Utilities sector lower today making it today's featured Utilities laggard. The sector as a whole closed the day up 0.3%. By the end of trading, Calpine fell 22 cents (-1.3%) to $17.04 on average volume. Throughout the day, 3.7 million shares of Calpine exchanged hands as compared to its average daily volume of 3.5 million shares. The stock ranged in price between $16.97-$17.34 after having opened the day at $17.19 as compared to the previous trading day's close of $17.26. Other companies within the Utilities sector that declined today were: Transportadora de Gas del Sur ( TGS), down 6.1%, China Hydroelectric Corporation ( CHC), down 4.4%, Energy Company of Minas Gerais ( CIG), down 3.5%, and Basic Sanitation Company of the State of Sa ( SBS), down 2.5%.
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Calpine Corporation, an independent wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines, as well as cogeneration power plants. Calpine has a market cap of $7.88 billion and is part of the utilities industry. The company has a P/E ratio of 94.1, above the S&P 500 P/E ratio of 17.7. Shares are up 3.7% year to date as of the close of trading on Monday. Currently there are eight analysts that rate Calpine a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Calpine as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

On the positive front, Empresa Distribuidora y Comercializadora No ( EDN), up 12.2%, Pure Cycle Corporation ( PCYO), up 6.2%, Centrais Eletricas Brasileiras ( EBR.B), up 3.1%, and U.S. Geothermal ( HTM), up 2.6%, were all gainers within the utilities sector with Exelon ( EXC) being today's featured utilities sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the utilities sector could consider Utilities Select Sector SPDR ( XLU) while those bearish on the utilities sector could consider ProShares UltraShort Utilities ( SDP).

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