Linked here is a detailed quantitative analysis of Progress Energy, Inc. (NYSE:PGN). Below are some highlights from the above linked analysis:
Company Description: Progress Energy, Inc. is a diversified energy company that owns two electric utilities serving approximately 3.1 million customers in North Carolina, South Carolina, and Florida.
Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:
- Avg. High Yield Price
- 20-Year DCF Price
- Avg. P/E Price
- Graham Number
PGN is trading at a discount to 1.) and 3.) above. If I exclude the high and low valuations and average the remaining two, PGN is trading at a slight discount. PGN earned a Star in this section since it is trading at a fair value.
Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description:
- Rolling 4-yr Div. > 15%
- Dividend Growth Rate
- Years of Div. Growth
- 1-Yr. > 5-Yr Growth
- Payout 15% of avg.
PGN earned one Star in this section for 3.) above. PGN has paid a cash dividend to shareholders every year since 1937 and has increased its dividend payments for 21 consecutive years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:
- NPV MMA Diff.
- Years to > MMA
PGN earned both of the available Stars in this section. The NPV MMA Diff. of the $10,999 is in excess of the $7,500 minimum I look for in a stock that has increased dividends as long as PGN has.
