Linked here is a PDF copy of my detailed analysis of Consolidated Edison, Inc. (ED) (alt.1, alt.2). Below are some highlights from the above linked analysis:
Company Description: Consolidated Edison, Inc., through its subsidiaries, provides electric, gas, and steam utility services in the United States.
Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1.) Avg. High Yield Price, 2.) 20-Year DCF Price, 3.) Avg. P/E Price and 4.) Graham Number. ED is trading at a discount to 3.) and 4.) above. If I exclude the high and low valuation, and average the remaining two valuations, ED is trading at a 9.9% discount. ED earns a Star for trading at a fair value.
Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description: 1.) Rolling 4-yr Div. > 15%, 2.) Dividend Growth Rate, 3.) Years of Div. Growth, 4.) 1-Yr. > 5-Yr Growth and 5.) Payout 15% of avg. ED earned a Star in 3.) above. It has increased its dividend for 10+ years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1.) NPV MMA Diff. and 2.) Years to >MMA. ED earned one Star in this section. Its current yield of 5.62% is in excess of the high-yield MMA rate of 4.61%.
Other: ED is both an S&P 500 Dividend Aristocrat and a member of The Broad Dividend Achievers™ Index. It has increased its quarterly cash dividend payments for 34 consecutive years.
Conclusion: ED earned one Star in the Fair Value section, one Star in the Dividend Analytical Data section and one Star in the Dividend Income vs. MMA section for a total of three Stars, which rates it as a 3 Star-Hold.
Back in December I reviewed ED and was quite harsh toward it. My perspective has changed. Tomorrow I will discuss the reason for the change.
Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.
Full Disclosure: At the time of this writing, I own shares of ED (3.6% of my Income Portfolio).
What are your thoughts on ED?
Recent Stock Analyses:
Popular Posts - Last 7 days
Presented below are my dividend stock and ETF/CEF holdings. This is not a recommendation to buy these securities. I have classified some of...
Getting a discount of 10%, 20% or even more is awesome. When it is on a big ticket item like a automobile, there are a lot of dollars to be ...
Over time, a conservative dividend growth based investment strategy usually does quite well versus the market as a whole. My goal as a divid...
Each Sunday I highlight any notable articles that I came across over the past week, along with any Carnivals I participated in. For those re...
Linked here is a detailed quantitative analysis of Emerson Electric Co. (EMR). Below are some highlights from the above linked analysis: ...
Linked here is a detailed quantitative analysis of Lockheed Martin Corp. (LMT). Below are some highlights from the above linked analysis: ...
In everything we do, we always want to be the best or be associated with the best. You never hear fans yelling, 'We're number 2, we&...
Monday, October 31, 2011 will mark my fourth full year of writing as Dividends4Life . It is hard to believe another year has passed. Like th...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
I couldn't begin to estimate how many different stocks are traded around the world on the various exchanges. Like everything else, there...