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The 3 Weirdest Subsidiaries Your Energy Stock Owns
 

The 3 Weirdest Subsidiaries Your Energy Stock Owns

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    The 3 Weirdest Subsidiaries Your Energy Stock Owns The 3 Weirdest Subsidiaries Your Energy Stock Owns Presentation Transcript

    • The 3 Weirdest Subsidiaries Your Energy Stock Owns
    • We all collect things... Source: Wikimedia Commons, Escapedtowisconsin
    • And energy companies are no different. • Raw energy • Power purchase agreements • Power plants • Transmission lines • Distribution centers Source: Wikimedia Commons, Stefan Kühn
    • But Some Subsidiaries... Are Just. Plain. Weird.
    • Just Energy Group Inc. Just Energy Group Inc. (NYSE: JE), a company focused on the competitive retail of electricity and natural gas, owns a water heater and HVAC business with 1.6 million customers. HVAC Business
    • Just Energy Group Inc. Just Energy Group (NYSE: JE), a company focused on the competitive retail of electricity and natural gas, owns a water heater and HVAC business with 1.6 million customers. HVAC Business
    • Just Energy Group Inc. Just Energy announced last week that it is selling National Home Services for $505 million. HVAC Business
    • Just Energy Group Inc. "We examined all of our non-core assets and concluded that the sale of NHS [National Home Services] at this price would allow us to pay down approximately $400 million of our outstanding debt, substantially reducing our leverage. We are intent on further reducing our debt in future periods through continued growth of our core energy business." HVAC Business -Co-CEO's Deb Merril and James Lewis
    • Just Energy Group Inc. HVAC Business PROS • Less debt • More focus CONS • Lower earnings – National Home Services was expected to account for 25% of Just Energy's total 2015 Base EBITDA
    • AGL Resources Inc. AGL Resources Inc. (NYSE: AGL), a natural gas distribution, marketing, and energy services company, owns the Caribbean’s leading shipping service. With 11 vessels serving 25 ports, AGL Resources just wasn’t satisfied being the largest gas-only distribution company in the U.S.
    • AGL Resources Inc. AGL Resources Inc. (NYSE: AGL), a natural gas distribution, marketing, and energy services company, owns the Caribbean’s leading shipping service. With 11 vessels serving 25 ports, AGL Resources just wasn’t satisfied being the largest gas-only distribution company in the U.S.
    • AGL Resources Inc. announced in April that it would sell Tropical Shipping for $220 million. AGL Resources Inc.
    • AGL Resources Inc. "We have consistently noted that AGL Resources' strategic focus is on owning and operating regulated natural gas utilities and related assets. While we have been responsible stewards of Tropical Shipping for the duration of our ownership, and have worked diligently to successfully increase profitability over the last two years, we have deliberately sought a more strategic owner for these assets." - Andrew Evans, Executive VP and CFO
    • PROS • More cash • Making amends with annoyed investors who never wanted Tropical Shipping • Back to exclusive natural gas focus CONS • $15-$25 million annual EBIT reduction • The umbilical cord isn’t totally cut – still hanging on to Triton Container investment AGL Resources Inc.
    • Southern Company Southern Company (NYSE: SO) owns SouthernLINC, a wireless communications network covering 127,000 square miles within Alabama, Georgia, southeastern Mississippi, and the Florida Panhandle. Wireless Communications
    • Southern Company SouthernLINC provides communications for Southern Company’s local utilities, as well as business, government, and consumer users. Wireless Communications
    • Southern Company In Southern Company’s latest 10-K annual report, it noted: “Non-electric operating revenues from these other business activities decreased $7 million, or 11.9%, and $11 million, or 15.7%, in 2013 and 2012, respectively, as compared to the prior years. The decreases were primarily the result of decreases in revenues at SouthernLINC Wireless related to lower average per subscriber revenue and fewer subscribers due to continued competition in the industry.” Wireless Communications
    • Southern Company Falling Revenue. Fewer Subscribers. Continued Competition. Wireless Communications Recipe For Disaster
    • Southern Company Wireless Communications ? Nope.
    • Southern Company There’s something to be said for grabbing an opportunity. But in Southern Company’s case, telecom is no easy investment. The future isn’t bright for a small-scale wireless company, and Southern would do well to take the lead of Just Energy and AGL Resources, and sell before it’s too late. Wireless Communications
    • Not All Dividend Stocks Are Equal The smartest investors know that dividend stocks crush their non-dividend paying counterparts over the long term. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks, unburdened by bothersome subsidiaries, that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now.