POWER! POWER!!! POWER!!!
I realize that utilities are usually fairly boring, but I am excited about this company so I took a piece of advise from the comments section of my previous post and spiced up the title of this one a little bit.
Using the Energy Information Administration's projections that U.S. electricity demand will grow by 50% over the next 30 years, the Nuclear Regulatory Commission Commissioner Kristine Svinicki estimates that America will need the equivalent of 50 new 1,000-mega-watt nuclear power plants for nuclear energy to continue to generate the 20% of American power that it does today.
This statement brings me to a company that I am long and have been extolling the virtues of here on CAPS for some time, Exelon (EXC).
Exelon is the United States' second largest generator of nuclear power. While many people hate nuclear, no new nuclear plants have been built in the U.S. since 1979 (I suppose that I wouldn't want one built in my neighborhood either), it fits the bill in being a low carbon source of electricity. If the current Administration is successful in getting some sort of cap and trade or carbon tax law passed it would be tremendous for clean power companies like EXC. If not, the naturally growing need for power cited above and embedded call option that plug-in electric vehicles may become reality and actually popular in the future should be more than enough to lift this well-run company on their own.
Despite the slumping economy, which hurts the demand for power, EXC managed to raise its net income by 23% during the first quarter. Plus, the company reaffirmed its guidance for the rest of the year.
With a dividend yield of 4.2%, Excelon is a company that pays investors, who are its rightful owners, to come along for the ride on the rising tide of a growing need for power and the government's desire for that power to come from clean, domestic sources.