Exelon (EXC) Stock Advancing on Delaware's Pepco Deal Approval

NEW YORK (TheStreet) -- Shares of Exelon (EXC) are gaining 0.75% to $33.67 in Thursday's afternoon trading session after the Delaware Public Service Commission approved the Exelon, Pepco (POM) merger yesterday.

Exelon is an American energy generator and distributor headquartered in Chicago, and Pepco is an energy delivery company headquartered in Washington D.C.

"The merger will bring together Exelon's three electric and gas utilities--BGE, ComEd and PECO, and Pepco Holding's Three electric and gas utilities--Atlantic City Electric, Delmarva Power and Pepco--to create the leading mid-Atlantic electric and gas utility," the companies stated.

The two companies announced the proposed deal back in April 2014, and it still awaits approval from the District of Columbia.

Shares of Pepco are gaining 0.41% to $27.16 in Thursday's afternoon trading session.

Separately, TheStreet Ratings team rates EXELON CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXELON CORP (EXC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 22.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 670.0% when compared to the same quarter one year prior, rising from $90.00 million to $693.00 million.
  • Net operating cash flow has significantly increased by 803.03% to $1,490.00 million when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of 11.62%.
  • EXELON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXELON CORP reported lower earnings of $1.87 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $1.87).
  • The debt-to-equity ratio is somewhat low, currently at 0.98, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
  • You can view the full analysis from the report here: EXC Ratings Report

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