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Author: cyclelex One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41614  
Subject: Re: Any thoughts on EXC Exelon Corp? Date: 2/9/2014 2:29 PM
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I'm intrigued. It's RMS from 1984 is -2.14 It has a nice dividend. It may not move for a few years, but has a steady history of earnings. Below is a little analysis from S&P Capital IQ. They give it a 3 out of 5 stars. Will have to be patient with this one in my opinion. Might wait til next year.



Analysis prepared by Equity Analyst
Justin McCann
on Nov 04, 2013, when the stock traded at
$28.44
.
Highlights

We expect operating EPS in 2013 to decline
nearly 10% from 2012's $2.85. While 2013 EPS
will reflect a full year of earnings from Constel-
lation Energy, this should be more than offset
by more average shares outstanding. In the first
nine months of 2013, operating EPS of $2.00 was
$0.21 below the year-ago level. The decline was
driven by the ongoing weakness in the econo-
my, lower-margin power contracts, higher op-
eration and maintenance (O&M) expenses, and
6.7% more shares.

For 2014, we expect operating EPS to decline
about 10% from anticipated results for 2013. We
believe the projected drop in earnings will re-
flect still lower realized prices and margins at
the Generation segment, and higher deprecia-
tion charges. We believe this will be partially
offset by the benefit from higher rates at the
utilities and relatively flat O&M costs.

EXC is expanding its rate base with its Smart
Grid investments. Through September 30, 2013,
BGE had installed 426,000 smart meters, PECO
465,000 and ComEd, whose deployment started
in September, nearly 10,000. Exelon also ex-
pects to have installed about 200 megawatts of
solar at a California facility by the end of 2013.
Investment Rationale/Risk

The stock was down 4% in the first 10 months
of 2013, but it was off nearly 25% from its 2013
high. This resulted largely from the much lower
than expected pricing results at a major power
capacity auction for the 2016-2017 period,
which indicated that the projected recovery in
the power markets was not taking place as ex-
pected. We view positively Exelon's 41% divi-
dend cut, effective with the June payment. We
think it was clear that the dividend could not be
sustained at its previous level without further
weakening the balance sheet.

Risks to our opinion and target price include a
significant downturn in the wholesale power
markets, a weakening of the service territory
economy, and a significant decline in the aver-
age peer P/E multiple of the sub-sector.

Our 12-month target price of $31 reflects a dis-
count-to-peers P/E of 13.4X our 2014 operating
EPS estimate. After the dividend cut and sharp
drop in the shares, the recent dividend yield
was 4.3%, slightly above the peer average. With
the payout ratio reduced from 91% of our oper-
ating EPS estimate for 2014 to 54%, we think the
dividend can be sustained at its current level.
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