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Utilities Stocks, Including American Electric, Making Big Moves Today
The market is having a bad day so far. The Nasdaq has fallen 0.1%; the S&P 500 has slipped 0.2%; and the Dow is trading down 0.2%. 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.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.2%, and its current biggest movers are:
Broker Summary: E-Trade Financial
After rising 5.6%, Copano Energy (Nasdaq:CPNO) is currently trading at a share price of $29.28. The company's volume is currently 251,081 shares for the day, 0.9 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 50.6%. 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. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Currently trading at $58.60 per share, Integrys Energy (NYSE:TEG) has fallen 4.2%. The company's volume for the day so far is 525,455 shares. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for TEG is 5.1. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
AEP (NYSE:AEP) is currently trading at $43.54 per share, a 2.8% increase. So far today, the company's volume is four million shares, 1.3 times the average volume over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. AEP has a P/B ratio of 1.41 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
El Paso Pipeline Partners (NYSE:EPB) has fallen 2.3% and is currently trading at $33.55 per share. The company's volume is currently 279,311 shares. Yesterday's volume was only 204,881 shares. The trading volume for a stock indicates the level of investor interest. 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 EPB is 6.4%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Due Diligence On Dividends
NRG (NYSE:NRG) has moved up 2.3% and is currently trading at $20.70 per share. At 3.6 million shares, the company's volume so far today is 0.8 times the current daily average. A stock's volume conveys how excited investors are about it. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for NRG is 0.4, which is relatively low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Atlas (NYSE:ATLS) has risen 1.9% and is currently trading at $33.55 per share. So far today, 92,977 shares have changed hands. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. ATLS has a high debt ratio of 82.3%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Spectra Energy (NYSE:SEP) is currently trading at a share price of $31.81, a 1.9% decline. The company's volume for the day so far is 38,753 shares, in keeping with its current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Relative to the industry P/E ratio of 23.89, SEP's 19.4 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.2%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Copano Energy, L.L.C. (Nasdaq:CPNO) | $2 billion | +5.6% |
| Integrys Energy Group (NYSE:TEG) | $4.79 billion | -4.2% |
| American Electric (NYSE:AEP) | $20.54 billion | +2.8% |
| El Paso Pipeline Partners, L.P. (NYSE:EPB) | $7.13 billion | -2.3% |
| NRG Energy (NYSE:NRG) | $4.61 billion | +2.3% |
| Atlas Energy LP (NYSE:ATLS) | $1.69 billion | +1.9% |
| Spectra Energy Partners, LP (NYSE:SEP) | $3.12 billion | -1.9% |
After rising 5.6%, Copano Energy (Nasdaq:CPNO) is currently trading at a share price of $29.28. The company's volume is currently 251,081 shares for the day, 0.9 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 50.6%. 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. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Currently trading at $58.60 per share, Integrys Energy (NYSE:TEG) has fallen 4.2%. The company's volume for the day so far is 525,455 shares. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for TEG is 5.1. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
AEP (NYSE:AEP) is currently trading at $43.54 per share, a 2.8% increase. So far today, the company's volume is four million shares, 1.3 times the average volume over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. AEP has a P/B ratio of 1.41 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
El Paso Pipeline Partners (NYSE:EPB) has fallen 2.3% and is currently trading at $33.55 per share. The company's volume is currently 279,311 shares. Yesterday's volume was only 204,881 shares. The trading volume for a stock indicates the level of investor interest. 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 EPB is 6.4%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Due Diligence On Dividends
NRG (NYSE:NRG) has moved up 2.3% and is currently trading at $20.70 per share. At 3.6 million shares, the company's volume so far today is 0.8 times the current daily average. A stock's volume conveys how excited investors are about it. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for NRG is 0.4, which is relatively low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Atlas (NYSE:ATLS) has risen 1.9% and is currently trading at $33.55 per share. So far today, 92,977 shares have changed hands. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. ATLS has a high debt ratio of 82.3%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Spectra Energy (NYSE:SEP) is currently trading at a share price of $31.81, a 1.9% decline. The company's volume for the day so far is 38,753 shares, in keeping with its current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Relative to the industry P/E ratio of 23.89, SEP's 19.4 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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