Filed Under: ,
Tickers in this Article: AWR, TRGP, ATLS, CMLP, ETP, WPZ, POR
The Nasdaq has remained steady, the S&P 500 has slipped 0.3% and the Dow remains relatively unchanged 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.

On a quiet day for the market overall so far, the Utilities sector (XLU) has slipped 1.2% and its biggest movers are currently:
CompanyMarket CapPercentage Change
American States (NYSE:AWR)2.1 million+2.6%
Targa (NYSE:TRGP).1 billion+1.9%
Atlas (NYSE:ATLS).81 billion+1.9%
Crestwood Midstream (NYSE:CMLP).14 billion+1.8%
Energy Transfer (NYSE:ETP).34 billion+1.7%
Williams Partners (NYSE:WPZ).02 billion+1.6%
Portland General Electric (NYSE:POR).07 billion-1.2%
Broker Summary: E-Trade Financial

American States (NYSE:AWR) has increased to a share price of $44.11, a 2.6% rise. So far today, the company's volume is 106,994 shares. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. Relative to the industry P/E ratio of 19.52, AWR's 17.2 is low. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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

Targa (NYSE:TRGP) is up 1.9% to reach a current price of $50.94 per share. The company's volume is currently 133,013 shares for the day, 0.6 times the average volume over the last three months. A stock's volume conveys how excited investors are about it. A company's investment value can be estimated using valuation ratios such as 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. 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. TRGP has a high capitalization ratio of 92%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Increasing 1.9%, Atlas (NYSE:ATLS) is trading at $35.25 per share. The company's volume for the day so far is 43,806 shares. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. ATLS has a dividend yield of 2.8%. 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: Due Diligence On Dividends

After rising 1.8%, Crestwood Midstream (NYSE:CMLP) is currently trading at a share price of $24.21. So far today, the company's volume is 29,844 shares, 0.2 times its current daily average. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. CMLP's P/B ratio of 2.17 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. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

Energy Transfer (NYSE:ETP) is at $42.46 per share after an increase of 1.7%. So far today, 1.1 million shares of the company's stock have changed hands. This is on pace to fall short of yesterday's volume of 3.7 million 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). ETP's PEG ratio is 0.69. 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.

Williams Partners (NYSE:WPZ) is currently trading at $52.96 per share, a 1.6% increase. The company's volume for the day so far is 198,355 shares, 0.3 times its current three-month average. The trading volume for a stock indicates the level of investor interest. 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. WPZ has a debt ratio of 53.8%. 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.

Portland General Electric (NYSE:POR) is down 1.2% to reach $26.97 per share. So far today, the company's volume is 251,616 shares. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. A company's value as an investment is more easily estimated using valuation ratios such as 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. The debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. POR has a high D/E ratio of 102%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. 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.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

comments powered by Disqus

Trading Center