Utilities No Just Utilities

3/30/2015


Investors tend to lump utilities together in their minds. But the sector is far from a homogenous group.

By digging into the annual reports of all 74 companies in our Utility Update, we learned that just 18 operate only regulated utilities. Just 13 companies generate all of their revenue from a single business unit, whether it's water, natural gas, electricity, or power generation.

Several of our utilities draw revenue from surprising sources. Hawaiian Electric ($32; HI) and CMS Energy ($34; CMS) own banks, while Allete ($53; ALE), Black Hills ($51; BKH), and Vectren ($44; VVC) operate coal mines. Still other utility companies run construction businesses — MDU Resources ($22; MDU) and Southwest Gas ($58; SWX). Otter Tail ($33; OTTR) generates nearly half of its revenue from metal parts and PVC pipe.

Our last extensive published overview of the utility sector was in the March 30, 2009, issue of the Forecasts, available in the Subscriber Area at www.DowTheory.com. Today's revenue composition for companies in our Utility Update is fairly consistent with that from six years ago. The breakdown of revenue coming from regulated utilities (65%) and nonregulated operations (35%) has barely budged. Among regulated operations, electricity still dominates, accounting for 77% of revenue.

For our Top 15 Utilities Portfolio, regulated utilities generate 75% of total revenue, compared to 54% six years ago. But today, electricity accounts for a smaller portion of sales (39% versus 43% six years ago), while natural gas has risen to 27% from 11%. Our exposure to other regulated operations, such as water and steam, has also increased to 8%.

We are making some changes to our Top 15 Utilities portfolio. New Jersey Resources ($31; NJR) and Portland General ($36; POR) are replacing AmeriGas Partners ($47; APU) and UGI ($33; UGI).

ANATOMY OF A UTILITY
Below we break down the revenue for each of the 74 stocks in our Utility Update. We are removing Energen ($65; EGN) from the Utility Update following the sale of its natural-gas utility to Laclede Group ($51; LG). Several other companies have moved from one group to another. See our Utility Update for more statistics.
---------------------------------------------------- Revenue By Business Segment ----------------------------------------------------
----------- Regulated Utilities -----------
------------------------------ Nonregulated Operations ------------------------------
Company (Price; Ticker)
Electric
(%)
Nat'l
Gas
(%)
Water
(%)
Other
(%)
Regulated
Total
(%)
Energy,
Production,
Distribution,
& Storage
(%)
Power
Generation
& Mktg.
(%)
Gas
Stor. & Pipeline
(%)
Marketing
Electricity
& Nat'l Gas
(%)
Other
(%)
Non-
regulated
Total
(%)
Revenue,
Last Fiscal
Year,
($Mil.)
Natural Gas
AGL Resources
($49; GAS)
0
18
0
69
88
0
0
2
11
0
12
5,385
AmeriGas ($47; APU)
0
0
0
0
0
100
0
0
0
0
100
3,713
Atmos Energy
($55; ATO)
0
62
0
2
64
0
0
36
0
0
36
4,941
Laclede Group
($51; LG)
0
90
0
0
90
0
0
0
10
0
10
1,627
New Jersey Res.
($31; NJR)
0
22
0
0
22
0
0
0
76
1
78
3,738
NiSource ($43; NI)
26
40
0
0
66
0
0
29
0
5
34
6,471
Northwest Natural
($47; NWN)
0
97
0
0
97
0
0
3
0
0
3
773
Piedmont Natural
($37; PNY)
0
100
0
0
100
0
0
0
0
0
0
1,470
Questar ($23; STR)
0
81
0
0
81
3
0
16
0
0
19
1,189
South Jersey
($55; SJI)
0
57
0
0
57
35
0
0
9
1
44
887
Southwest Gas
($58; SWX)
0
0
0
7
7
58
0
0
0
35
93
2,122
Suburban Propane
($43; SPH)
0
0
0
0
0
93
0
0
4
3
100
1,938
UGI ($33; UGI)
0
11
0
0
11
70
1
15
0
2
89
8,277
WGL Holdings
($55; WGL)
0
52
0
0
52
1
0
0
48
0
49
2,781
Water
Amer. States Wtr.
($39; AWR)
7
0
70
0
78
0
0
0
0
22
22
466
Aqua America
($27; WTR)
0
0
97
0
97
0
0
0
0
3
3
780
Artesian Res.
($21; ARTNa)
0
0
94
0
94
0
0
0
0
6
6
72
California Water ($25; CWT)
0
0
100
0
100
0
0
0
0
0
0
597
Connecticut Wtr.
($37; CTWS)
0
94
0
94
0
0
0
0
6
6
95
Middlesex Water
($22; MSEX)
0
0
88
0
88
0
0
0
0
12
12
117
SJW ($30; SJW)
0
0
98
0
98
0
0
0
0
2
2
320
Hybrids
EQT ($81; EQT)
0
11
0
0
11
65
0
17
0
6
89
2,470
National Fuel
($61; NFG)
0
39
0
0
39
38
0
10
13
0
61
2,113
Oneok ($47; OKE)
0
1
0
2
3
96
0
0
0
0
97
12,195
Electric
Allete ($53; ALE)
88
0
0
0
88
0
0
0
0
12
12
1,137
Alliant Energy
($62; LNT)
81
15
0
2
98
0
0
0
0
2
2
3,350
Ameren ($41; AEE)
81
19
0
0
100
0
0
0
0
0
0
6,053
American Electric
($56; AEP)
55
0
0
0
55
27
14
0
0
4
45
17,020
Cleco ($54; CNL)
100
0
0
0
100
0
0
0
0
0
0
1,269
Consolidated Edison
($61; ED)
71
15
0
5
90
0
0
0
9
0
10
12,919
Duke Energy
($75; DUK)
90
2
0
0
92
0
1
0
6
0
7
23,930
Edison Int'l
($63; EIX)
100
0
0
0
100
0
0
0
0
0
0
13,413
El Paso ($38; EE)
100
0
0
0
100
0
0
0
0
0
0
918
Empire District
($25; EDE)
91
8
0
0
99
0
0
0
0
1
1
652
Entergy ($77; ETR)
77
1
0
0
78
0
0
0
22
0
22
12,495
FirstEnergy
($35; FE)
64
0
0
0
64
0
0
0
36
0
36
15,049
Great Plains
($26; GXP)
100
0
0
0
100
0
0
0
0
0
0
2,568
Hawaiian Electric
($32; HE)
92
0
0
0
92
0
0
0
0
8
8
3,240
Idacorp ($61; IDA)
100
0
0
0
100
0
0
0
0
0

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