Utility Market

August 10, 2012 17:18 by David Patterson in M&A  //  Tags: ,   //   Comments (0)

The Dow Jones Utility Average (“DJU”) had its ups and downs during the last 5 weeks, closing at 485.14 on August 10, 2012, up 1.4% over the July 6, 2012 close of 478.43.  At one point the DJU made a run at 500, reaching an intraday high of 498.84.  The 50 and 200 day moving averages continued their upward climb.

All the DJU components reported their latest quarterly results during the last few weeks.  In summary, the cumulative revenue, EBITDA, and net income declined slightly for the group while the stock price and enterprise value increased.  This resulted in an expansion of the revenue multiple, EBITDA multiple, and the PE multiple.  The most significant change was the median EBITDA multiple increased from 8.4x to 9.2x.

Dividend yield moves inversely to stock price.  As the stocks increase in value, the dividend yield declined.


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