Top picks from S&P: ITC
The electricity transmission company should see double-digit growth in revenues over the next two years.
By Christopher Muir, S&P Capital IQ, The Outlook
ITC (ITC) is the first independently owned and operated electricity transmission company in the U.S. As of December 31, 2012, ITC owned 15,190 circuit miles of transmission lines in Michigan, Iowa and other states.
Unlike most regulated electric utilities, ITC owns the high-voltage power line networks that transmit electricity from generating stations to low-voltage, local distribution networks, but not the generators or distribution systems.
We estimate revenue will rise by 14% in 2013 and 15% in 2014, helped by a growing rate base and new projects entering service.
ITC is waiting for regulatory approval for its December, 2011 proposed acquisition of 15,400 miles of transmission lines in Arkansas, Louisiana, Mississippi and Texas from Entergy (ETR).
The proposed deal would give Entergy shareholders 50.1% of the merged company in a stock-for-stock deal. There is some risk that regulators will not approve the deal, but ITC has convinced other regulators in the past. We believe the deal will close by the end of the third quarter of 2013.
On a standalone basis, we see ITC's stock as being attractive with 15% to 17% EPS growth expected over the next five years. Factoring in the benefits from the proposed acquisition, including a $13.50 per share special dividend, the stock price looks even more compelling to us.
More from TheStockAdvisors.com
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.