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Utilities Stocks, Including Dominion, Making Big Moves on August 29, 2012
The Nasdaq is down 0.2%, the S&P 500 has moved little and the Dow has been relatively flat so far today. 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) has fallen 0.3% despite little change in the market overall. The biggest movers in the sector so far are:
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Falling 3.6%, TransAlta Corporation (NYSE:TAC) is currently at a share price of $15.47. So far today, 42,812 shares have changed hands, with trading activity in keeping with yesterday's lighter than yesterday's volume of 104,377 shares. The trading volume for a stock indicates the level of investor interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. TAC has a high D/E ratio of 228%. This shows that the company's assets are financed primarily through debt. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Slipping 2.5%, Companhia Paranaense de Energia (NYSE:ELP) is currently trading at $18.84 per share. So far today, 153,037 shares have changed hands. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). PEG ratio for ELP is 1.46. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Companhia de Saneamento Basico (NYSE:SBS) has decreased to $87.61 per share, a 2.1% fall. With 207,271 shares changing hands so far today, the company's volume is one times its average over the past three months. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. SBS has a P/B ratio of 1.65 which shows that its share price is higher than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Brookfield Infrastructure Partners (NYSE:BIP) is currently trading at a share price of $34.84, a 1.8% decline. So far today, the company's volume is 164,358 shares. This is in line with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. BIP has a dividend yield of 4.2%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield
CPFL Energia S.A (NYSE:CPL) is down 1.8% to reach $21.37 per share. This morning, 162,485 shares have been traded, while it was 703,191 shares yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. Compared to the industry average of 8.93, CPL's P/E ratio of 12.1 is quite high. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Profit With The Power Of Price-To-Earnings
Dominion (NYSE:D) is currently trading at a share price of $53.05, a 1.7% decline. The company's volume for the day so far is 518,917 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. D has a high debt ratio of 74.4%. This means that most of the company's assets are financed through debt. 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.
DCP Midstream (NYSE:DPM) has fallen 1.6% and is currently trading at $42.85 per share. The company's volume is currently 77,163 shares for the day, one times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for DPM is a high 1.3. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. 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) has fallen 0.3% despite little change in the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| TransAlta Corporation (NYSE:TAC) | $3.69 billion | -3.6% |
| Companhia Paranaense de Energia (NYSE:ELP) | $5.29 billion | -2.5% |
| Companhia de Saneamento Basico (NYSE:SBS) | $10.19 billion | -2.1% |
| Brookfield Infrastructure Partners (NYSE:BIP) | $5.09 billion | -1.8% |
| CPFL Energia S.A (NYSE:CPL) | $10.47 billion | -1.8% |
| Dominion (NYSE:D) | $30.93 billion | -1.7% |
| DCP Midstream (NYSE:DPM) | $2.55 billion | -1.6% |
Falling 3.6%, TransAlta Corporation (NYSE:TAC) is currently at a share price of $15.47. So far today, 42,812 shares have changed hands, with trading activity in keeping with yesterday's lighter than yesterday's volume of 104,377 shares. The trading volume for a stock indicates the level of investor interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. TAC has a high D/E ratio of 228%. This shows that the company's assets are financed primarily through debt. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Slipping 2.5%, Companhia Paranaense de Energia (NYSE:ELP) is currently trading at $18.84 per share. So far today, 153,037 shares have changed hands. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). PEG ratio for ELP is 1.46. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Companhia de Saneamento Basico (NYSE:SBS) has decreased to $87.61 per share, a 2.1% fall. With 207,271 shares changing hands so far today, the company's volume is one times its average over the past three months. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. SBS has a P/B ratio of 1.65 which shows that its share price is higher than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Brookfield Infrastructure Partners (NYSE:BIP) is currently trading at a share price of $34.84, a 1.8% decline. So far today, the company's volume is 164,358 shares. This is in line with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. BIP has a dividend yield of 4.2%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield
CPFL Energia S.A (NYSE:CPL) is down 1.8% to reach $21.37 per share. This morning, 162,485 shares have been traded, while it was 703,191 shares yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. Compared to the industry average of 8.93, CPL's P/E ratio of 12.1 is quite high. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Profit With The Power Of Price-To-Earnings
Dominion (NYSE:D) is currently trading at a share price of $53.05, a 1.7% decline. The company's volume for the day so far is 518,917 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. D has a high debt ratio of 74.4%. This means that most of the company's assets are financed through debt. 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.
DCP Midstream (NYSE:DPM) has fallen 1.6% and is currently trading at $42.85 per share. The company's volume is currently 77,163 shares for the day, one times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for DPM is a high 1.3. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. 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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