We previously researched; analyzed and compared Exelon (EXC) versus Wisconsin Energy (WEC) and our report was published on June 8th. We made this comparison because we were intrigued by the fact that Exelon’s shares had paid a sharply higher dividend yield than Wisconsin Energy, which we have held since 1997. A number of factors that previously attracted us to Exelon in order to research and analyze it versus Wisconsin Energy were as follows:
- Exelon’s three utility subsidiaries each served a larger metropolitan area than WEC’s largest metropolitan area of Milwaukee.
- Exelon was part of the Dow Jones Utility Index
- Exelon had the largest fleet of power plants that not only generated electricity and gas for its utilities, but also for other companies. WEC used to own all of its power plants but sold its Point Beach Nuclear Power Plant to NextEra Energy (NEE) in 2007.
- Exelon’s dividend yield of 5.4% as of June 7th was higher than WEC’s 3.13% dividend yield
- The potential for “natural gas prices to normalize” which is the siren song of the EXC bulls
Based on our analysis, we concluded although Exelon had a significantly higher dividend yield versus Wisconsin Energy, the difference was justified because Wisconsin Energy had a stronger record of operating and financial performance versus Exelon and its subsidiaries. We see Exelon as a big, bloated utility conglomerate seeking to grow its business through its political connections, lobbying for the Waxman-Markey cap-and-trade bill and attempted acquisitions of other utilities. We don’t judge John Rowe and Exelon for lobbying for the bill because he was acting on behalf of Exelon and its stockholders.
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