Exelon Corporation (EXC): What’s A Smart Move?

American Electric Power Company, Inc. (NYSE:AEP), is another utility company that reported its earnings last week, with sales being better than expectations and profits in line with the consensus estimates. It has currently increased its dividend pay-out by 4.3% to $0.49 a share. The company is still trying to revive from its regulatory disaster in Ohio, and is currently trying to offset Ohio’s deregulation with its other operations.

American Electric generates two third of its power from coal which can be a reason of long-term worries once people start moving towards clean energy. For this reason the company is planning to invest $3.6 billion in 2013 in order to diversify its operations. The company at the moment has uncertainties surrounding it so I would recommend staying away from it.

Final words

Exelon Corporation (NYSE:EXC) is a smart play in an investor’s portfolio as the company has both nuclear and natural gas in its portfolio to distribute its risk. The combination of natural and nuclear energy and its trading activity should result in better margins and higher profits, and make the company a safe bet in the long run. Moving forward, when the world moves towards clean source of energy, Exelon Corporation (NYSE:EXC) should be well placed to derive benefit out of it. I believe this is a good utility stock to buy at current prices.

The article Is This Utility a Good Play After Its Dividend Cut? originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.