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Tickers in this Article: BKH, NRGM, CPNO, SWX, NFG, CVA, BIP
It's been a good morning for the market. The Nasdaq has increased 0.6%; the S&P 500 has climbed 0.5%; and the Dow has increased 0.6%. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

Underperforming the market overall, the Utilities sector (XLU) is up 0.3%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Black (NYSE:BKH)$1.37 billion+7.8%
Inergy (NYSE:NRGM)$1.68 billion+2%
Copano Energy (Nasdaq:CPNO)$2.21 billion-1.7%
Southwest (NYSE:SWX)$1.95 billion+1.3%
National Fuel (NYSE:NFG)$4.1 billion+1.1%
Covanta (NYSE:CVA)$2.35 billion-1%
Brookfield Infrastructure Partners (NYSE:BIP)$5.21 billion-0.8%
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After rising 7.8%, Black (NYSE:BKH) is currently trading at a share price of $33.43. At 1.1 million shares, the company's volume so far today is above yesterday's volume of 384,152 shares. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio shows the proportion of assets that a company is financing through debt. BKH's debt ratio of 68.3% is fairly high. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Inergy (NYSE:NRGM) is up 2% to reach a current price of $22.83 per share. The company is currently trading a volume of 9,495 shares. This is 0.4 times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. NRGM has a D/E ratio of 57%. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

Copano Energy (Nasdaq:CPNO) is trading at $29.99 per share, down 1.7%. The company's volume is currently 79,536 shares for the day, 0.3 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. CPNO has a high capitalization ratio of 53.4%. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

Southwest (NYSE:SWX) has risen 1.3% and is currently trading at $42.87 per share. The company is currently trading a volume of 26,022 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for SWX is 2.8%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Due Diligence On Dividends

National Fuel (NYSE:NFG) has moved up 1.1% and is currently trading at $49.74 per share. The company's volume is currently 82,819 shares for the day, which is likely to result in less activity than yesterday's volume of 314,808 shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. NFG has a PEG ratio of 29.43. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

Currently trading at $17.50 per share, Covanta (NYSE:CVA) has fallen 1%. So far today, 135,086 shares have changed hands. This is 0.3 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CVA's stock is trading for more than its book value with a P/B ratio of 2.35. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio

Falling 0.8%, Brookfield Infrastructure Partners (NYSE:BIP) is currently at a share price of $36.04. At 143,819 shares, the company's volume so far today is in line with the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. BIP's P/E ratio of 39.6 is above the industry average of 3.12. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Find P/E And PEG Ratios

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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