What You Were Buying Last Week: SSE PLC (SSE)

And Ian Marchant, SSE’s CEO, is due to step down at the end of this month. Since Marchant’s replacement will be his current deputy, Alistair Phillips-Davies, at least some continuity is likely to be preserved. But there will inevitably be worries about whether the new CEO will be able to steer SSE safely to further growth.

Of course, last week’s buyers will also be focusing on the upsides of SSE. While its retail business may be subject to the limitations of a regulated market, people will always need to buy energy, and SSE has a great deal of expertise in working profitably within such restrictions. Better still, SSE PLC (LON:SSE)’s wholesale generation business is unregulated, and it’s therefore able to make as much profit from that as the market allows.

There’s also SSE’s canny exploitation of the heavily government-subsidized “green energy” market. 25% of SSE’s current generating capacity comes from “green” sources, and it has plans to raise that proportion to 40% over the next twelve years. While there’s obviously no guarantee that subsidies will continue, SSE clearly hopes to make hay while that particular sun is shining.

Although SSE PLC (LON:SSE)’s current share price may be down 8% over the past couple of weeks, it’s still up nearly 7% so far this year, and over 15% on this time last year. If recent sell-offs have been over-done, now could be a good time to buy into this dividend-obsessed company, and secure some capital growth from any recovery, along with the dividends.

* based on aggregate data from The Motley Fool ShareDealing Service.

The article What You Were Buying Last Week: SSE originally appeared on Fool.com.

Jon Wallis owns shares in SSE. The Motley Fool has no position in any of the stocks mentioned.

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