Vectren Corporation (VVC)
- 24.98 (USD)
(-0.2 %)
9/3/2010 11:20:00 AM
VVC Stock Report
NYSE:
VVC
24.98
(USD)
(-0.2 %
)
09/03 11:20 AM
Open
25.25
Day's Range
24.95
-
25.32
52Wk Range
21.66 - 25.60
Mkt Cap
2.0 Billion
Vol/Avg
104572/282,337
Div/Yield
5.46%
Key Fundamentals
| Price (11:20 AM) | 24.98 |
|---|---|
| Volume (11:20 AM) | 104572 |
| Last Close Price | 24.98 |
| 10 Day Average Volume | 282,337 |
| 13 Week Price Range | 22.33 - 25.50 |
| 52 Week Price Range | 21.66 - 25.60 |
| LTM Revenue | 2.0 Billion |
| Shares Outstanding (12/31/2009) | 81.2 Million |
| Market Capitalization | 2.0 Billion |
| Shares Held By Institutions | 1.9 Million |
| Institutional Holders | 260 |
| % Shares Held By Institutions | 64.24% |
| Earnings Per Share (EPS) | 1.65 |
| P/E Ratio | 14.4718 |
| Book Value Per Share | 17.4432 |
| Gross Margin | 27.51% |
| Annual Dividend | 1.35 |
| Dividend Yield | 5.46% |
| Beta | 0.414463 |
| Fiscal Year Ends | December |
About Vectren Corporation
Vectren Corporationis considered to operate in the Utilities sector. They specifically operate in the Diversified Utilities business segment contained within the Utilities industry.
Vectren Corporation, an Indiana corporation, is energy and applied technology holding company. The Company organized on June 10, 1999, to effect the merger of Indiana Energy, Inc. and SIGCORP, Inc. On March 31, 2000, Indiana Energy merged with SIGCORP and into Vectren. The Company's wholly owned subsidiary, Vectren Utility Holdings, Inc. serves as the intermediate holding company for three operating public utilities: Indiana Gas Company, Inc. formerly a wholly owned subsidiary of Indiana Energy, Southern Indiana Gas and Electric Company, formerly a wholly owned subsidiary of SIGCORP, and the Ohio operations. Utility Holdings also has other assets that provide information technology and other services to the three utilities. Indiana Gas provides energy delivery services to approximately 562,000 natural gas customers located in central and southern Indiana. SIGECO provides energy delivery services to approximately 140,000 electric customers and approximately 112,000 natural gas customers located near Evansville in southwestern Indiana. SIGECO also owns and operates electric generation to serve its electric customers and optimizes those assets in the wholesale power market. Indiana Gas and SIGECO generally do business as Vectren Energy Delivery of Indiana. The Ohio operations provide energy delivery services to approximately 318,000 natural gas customers located near Dayton in west central Ohio. The Company, through Vectren Enterprises, Inc., is also involved in nonregulated activities in three primary business areas: Energy Marketing and Services, Coal Mining and Utility Infrastructure Services. Energy Marketing and Services markets and supplies natural gas and provides energy management services, including energy performance contracting services. Utility Infrastructure Services provides underground construction and repair, facilities locating, and meter reading services. The Company segregates its operations into three groups: a Utility Group, a Nonregulated Group, and Corporate and other. The Other Businesses group includes a variety of wholly owned operations and investments that invest in broadband communication services, energy-related opportunities and services, real estate, and leveraged leases, among other investments. The Company is subject to federal, state, and local regulations with respect to environmental matters, principally air, solid waste, and water quality.
Ockham's Rating/Recommendation Summary
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VVC Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at VVC through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.05x and 0.78x respectively.
Utilizing this range we can see that VVC’s current Price to Sales per share ratio of 1.00x is above its historical average only slightly. So, while not a major concern it is worth noting that from a value perspective VVC does not look undervalued on a Price to Sales basis. However, were the Price to Sales ratio to drop by 9% (the historical average) then we would become more positive on this stock.
VVC Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. VVC is above its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for VVC to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 18.00 and a 13.31 low over the same period.
So, again, with a current Price to Cash Earnings per share ratio of 16.50, VVC is presently above its historical range. Ockham Research is always focused upon the value that investors have placed upon a given metric in the past. In other words, how much would an investor pay for a particular level of Cash Earnings in terms of stock price, and how does that relate to today. Naturally, we utilize proprietary methods to accomplish this, but the basic premise holds true and is simple to understand. For VVC, we are a bit negative on the Cash Earnings level given its higher than historical norm.
VVC Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
When reviewing dividend yields for VVC, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. VVC’s estimated annual dividend is 1.35 resulting in a current dividend yield of 5.38%. The highest dividend yield from VVC over recent history was 7.44% while the lowest dividend yield was 0.00%. VVC’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 44.60% above the median which weighs very positively on our analysis of VVC.