An Insider Bought Piedmont Natural Gas

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Two other distributors of natural gas are AGL Resources Inc. (NYSE:GAS) and Integrys Energy Group, Inc. (NYSE:TEG). The dividend yields at these two companies are even higher than at Piedmont, above 4.5% in both cases and above 5% for Integrys. Betas are similar, in the 0.5-0.6 range, so AGL and Integrys are about as protected from a downside surprise in the economy as Piedmont is. We would also note that Integrys has P/E multiples in the teens, and so may offer slightly more value. Even with the insider activity at Piedmont, these stocks might be better choices for investors looking for yield.

Income or defensive investors may prefer electric utilities, such as Duke Energy Corp (NYSE:DUK) and The Southern Company (NYSE:SO). These companies have much larger market capitalizations, above $35 billion in both cases, and their stock prices are even less correlated with the market indices given their betas of 0.1. Their dividend yields are in the 4.5% to 5.0% range, so they have somewhat higher yields than Piedmont as well. They certainly seem to have less macro risk, and with richer dividend payments as well we think they are better income stocks. See more cheap dividend stocks.

We don’t think there is much of an upside in a natural gas utility, as natural gas prices affect revenue and costs about evenly. Piedmont does look somewhat attractive in terms of its yield and weak relationship with the market, but other utilities seem to be even better on that score.

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