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Dividend Yields Ideas Commentary ++ Readers Question EON, RWE, NOK, JD



June 13, 2011 – Comments (0) | RELATED TICKERS: EONGY , RWEOY , NOK

Recently, a reader of Dividend Yields, Mr. C#, ask for information about his investment ideas E.ON, RWE (both German utilities), Nokia and JD Sports. Here is our view:

E.ON and RWE suffered under the decision by the German government not to take back several nuclear power plants into operation. These plants were switched off by the state due to fears from the Fukushima disaster. E.ON and RWE generate with its nuclear power plants biggest profits. A trial by the utilities is pending. Profits of E.ON are weak within the past quarters, the earnings of RWE are still strong. Both have a strong ability to pass higher energy production costs to customers. With a P/E ratio around 6, the market has priced high earnings declines. We think that could be a fair value in terms of the shutdown of the nuclear power plants. In addition many other threats like the CO2 Emission certificates are available. Should the tax on the nuclear burn elements be abolished, both shares have upside potential. Read the full comment by Dividend Yields...


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