Vectren Corp (NYSE:VVC)

CAPS Rating: 3 out of 5

An energy holding company & through its subsidiary, Vectren Utility Holdings, Inc. serves as the intermediate holding company for three operating public utilities: Indiana Gas Company, Inc., Southern Indiana Gas & Electric Company, & Ohio operations.

Recs

1
Player Avatar KurtEng (32.84) Submitted: 5/24/2011 10:55:57 AM : Outperform Start Price: $23.29 VVC Score: +29.65

This is a boring company. They are headquartered in Evansville, IN - it's not an exciting city. They provide gas and electricity in Indiana and Ohio. Meh. Earnings growth is less than spectacular. They turn a profit almost every year and they have increased the for 49 consecutive years. Earnings are quite predictable and the stock price doesn't move very fast either way. Some may find that boring and it won't get you a +100 point score on CAPS in two months, but it is a great stock to hold for long terms.

To illustrate the power of dividend growth, someone who bought this stock in June of 1988 paid around $7.50 for a share. That investment is repaid in dividends today every 5.43 years at the current rate, which will almost certainly increase this year. That means people who got in in 1988 can tick off another 100% return every 5.43 years regardless of how the price of the stock changes. I have this stock on DRIP and it has become a behemoth. During the financial crisis I got more stocks with each dividend payout and the value of the account just keeps slowly growing. People will still be buying gas and electricity in 25 years and I will probably still own this stock then.

Member Avatar KurtEng (32.84) Submitted: 4/17/2013 2:49:47 AM
Recs: 0

I thought I would reply to my original recommendation now that it has been almost two years. I have been following the company and I think they are continuing to head in a smart direction and have a solid business. However, the price has gone up nearly 50% since 2011, so I think it's hard to argue that the stock is a good value right now. I still own shares, but I took the stock off DRIP and now I use dividends from Vectren to invest in more attractive stocks.

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