American electric power, dominion resources_ exploding volcanoes of opportunity_ – american electric power company inc (nyse_aep) _ seeking alpha

I was recently watching the Sunday morning political talking heads and heard a guest being described as not being an “exploding volcano of enthusiasm.” What a wonder image and thought it would fit well within this comparison of utility stocks. Electricity names superheroes The short answer is neither are “Exploding Volcanoes of Opportunity,” but one offers a bit better valuation than the other. Electric utility companies in california According to Morningstar, American Electric Power (NYSE: AEP) is 14% overvalued and carries a 2 Star rating while Dominion Resources (NYSE: D) is trading at a 2% premium to Fair Value and carries a 3 Star rating.

Overall, there are not many utilities that I would consider as exploding volcanoes of opportunity. Electricity and magnetism review sheet According to sector Fair Valuation calculations from Morningstar, in general, utilities are currently 10% overvalued. Gas out From the 3-yr Morningstar graph below, while 10% overvaluation is lower than the 1.18 registered in late Jan. Gas near me open now 2015, valuations remain elevated. Electricity kwh cost calculator Looking back on the 5-yr chart of sector Fair Value, this is only the third time when valuations were this extended: April 24, 2013 to May 10, 2013; Oct. Types of electricity consumers 28, 2014 to Feb. Gasbuddy nj 26, 2015; and June 30, 2016 to present.

Specifically looking at AEP and D, AEP has not been this overvalued since the end of 2014, while D is offering slightly better value than at the end of 2014. Gasbuddy Below are 8-yr charts of M* Price vs. Bp gas locations Fair Value calculations.

Reviewing charts offers a similar picture from a historic viewpoint. Gas stoichiometry examples AEP has been overvalued on FastGraph since the end of 2015 after share prices retreated due to uncertainty in Ohio’s move to deregulate their electric utility market. Gas bloating D has been overvalued on FastGraph since the end of 2012.

FastGraph also offers a great visual of management performance in generating return on invested capital (ROIC). Gsa 2016 pay scale AEP has been a rock of ROIC performance, fluctuating very little since 2000. Electricity video ks2 D experienced a bit more fluctuation in ROIC over the same timeframe. La gastritis Below are ROIC graphs from FastGraph:

Within the industry average of between 4% and 5% ROIC, these two utilities have generated 15-yr average 5.9% ROIC for AEP and 5.5% for D, both above many industry peers.

American Electric Power has grown into operating the largest network-miles of high power transmission assets. Kushal gas agencies belgaum Currently, AEP operates more than 40,000 miles of FERC-regulated assets. Gas hydrates energy With higher ROE allowed by the FERC, AEP’s transmission footprint and capital expenditures in additional expansion will continue to add stability to earnings. Gaslighting examples Below is a table of electric utilities and their transmission network in miles, total transmission investments 2004 to 2013, and value of proposed projects. Static electricity online games As shown, AEP leads the pack in total miles of transmission assets, and is among the top tier of transmission investors since 2004.

AEP operates in 11 states and services 5 million customers. Electricity song billy elliot This diversity of regulatory environments along with a strong dose of FERC-regulated assets makes AEP one of the most diversified electric utilities.

However, not all is rosy with AEP as it struggles with closing or upgrading its large coal-fueled power fleet. Gaz 67b for sale The recent changes to Ohio’s utility market add a bit of uncertainty to this important segment of profitability for AEP.

Dominion Resources is predominately an electricity and natural gas utility with substantial gas infrastructure assets. Static electricity how it works D generates 27,000 MW of electricity and manages 12,000 miles of gas pipelines, along with being one of the largest providers of natural gas storage. Electricity jeopardy powerpoint Dominion anticipates a 2% underlying growth profile in utility demand, stronger than the nation’s average, due to economic growth in its geographic areas of Virginia and North Carolina. Gas in babies at night Dominion’s gas assets include pipelines, gathering systems, midstream processing and storage. Grade 6 science electricity multiple choice test Most of D’s business is focused on the mid-Atlantic region.

Dominion created a drop-down MLP to hold and invest in its Cove Point LNG export facility along with ancillary pipelines. Mp electricity bill payment jabalpur D is not only the general partner but also holds more than 60% of shares outstanding. Nyc electricity cost In late 2017, Cove Point will move from construction to operating as the closest LNG export facility to the Marcellus and Utica shale plays. Gas after eating salad As this $3.8 billion project comes on line, D should experience both higher income from MLP distribution growth and higher incentive distribution rights IDR. Gas prices going up in michigan MLP management anticipates a 20% distribution growth rate over the next few years. Electric utility companies charge customers for If so, next year, D could be in the position of collecting 50% of available MLP distribution over $1.05 per unit. Electricity transmission costs As with many general partners, this is the very lucrative sweet spot of the MLP-GP partnership.

In Feb., Dominion Resources announced it was joining its peers in the consolidation trend in the utility sector. Gas in back trapped D is acquiring a western-based gas utility, expanding its regulated utility business to the mountain states as well as its anchor in the mid-Atlantic. Gas leak east los angeles This regulatory diversification will add to stability of earnings, as it does with AEP.

Like AEP, not all is thumbs up for Dominion. Gas bijoux nolita With a portion of its business in the Northern Virginia area, a downsizing of government could crimp demand growth from a slowing of the rate of increase of the number of government offices. Electricity for dummies pdf As the size of government grows and contracts, not only does the number of employees change, but so does underlying electricity and natural gas demand. Gas laws worksheet pdf Unlike its peers in the south and west, where long-term power purchase agreements, or PPA, are the norm, many of Dominion’s power plants are in the jurisdiction of PJM, the operator of the power grid from Washington DC to Chicago and up the coast past New York. Z gas tecate telefono Rather than 20-yr PPAs, PJM utilizes three-year rolling auctions which add uncertainty in long-range forecasts for electricity pricing models. Electricity cost per kwh by country Any historic review of East Coast power prices will see it has more volatility than the stock market. Electricity problem in up Current low natural gas pricing is pressuring profitability of nuclear power plants, like D’s Millstone, CT facility. Electricity bill bihar electricity board Several nuclear plants around the East Coast and Midwest are being shuttered due to low profitability.

A few years ago, one of my favorite graphs moved from most proxy notices to the beginning of the SEC 10-K Annual Report. 9gag instagram Known as the “Comparison of 5-Year Cumulative Total Returns,” this tool compares a specific stock’s total return performance to both the S&P 500 and a peer group of stocks. Electricity symbols ks2 Below are graphs of this tool as offered in their respective 2015 10-K reports.

According to these graphs, $100 invested in AEP on Dec. Gas yourself in car 31, 2010, would be worth $201.00 on Dec. Electricity storage costs 31, 2015, while the same $100 invested in D would be worth $191.44. K gas station While AEP slightly outperformed over the previous 5 years, its current overvaluation compared to D should easily make up this difference.

While neither stock could be considered “Exploding Volcanoes of Opportunity,” Dominion Resources gets the nod going forward. Gas konigsforst Its geographic expansion, extensive natural gas infrastructure assets coupled with its GP exposure to its MLP drop-down is reason enough to favor Dominion Resources.