A Closer Look at the NV Energy, Inc. (NVE) Merger Deal

Sempra Energy (NYSE:SRE) is also a consistently increasing dividend paying company. For the past ten years, Sempra has increased its dividend payment from $1 per share in 2003 to $2.40 per share in 2012. Sempra is trading at $81.30 per share, with the total market cap of around $19.8 billion. The market seems to value Sempra the most expensive, at 11.4 times EV/EBITDA. It offers shareholders lower dividend yield than Avista, at 3.2%. Sempra U.S. Gas & Power is one of the most active companies involving in solar projects. The first phase of Mesquite Solar is generating emission-free electricity for around 56,000 homes. With the potential of up to 700 MW in capacity, Mesquite Solar could be considered the biggest photovoltaic solar power plant in North America.

Interestingly, NV Energy, Inc. (NYSE:NVE) is not a company that income investors would like the best, with the dividend payment starting from 2007. The dividend has increased from $0.16 per share in 2007 to $0.64 per share in 2012. However, its dividend yield is juicier than Sempra, at 3.8%.

My Foolish take

By integrating NV Energy into MidAmerican, MidAmerican could enhance the service to the Nevada area with the focus on customer satisfaction. On the other hand, NV Energy could get access to huge financial resources and tap in the renewable energy segment, in which MidAmerican has a lot of expertise. To conclude, Warren Buffett commented:

This is a great fit for Berkshire Hathaway Inc. (NYSE:BRK.B), and we are pleased to make a long-term investment in Nevada’s economy. Through MidAmerican, we have found in NV Energy a great company with similar values, outstanding assets, and a superb management team.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article A Closer Look at the NV Energy Merger Deal originally appeared on Fool.com and is written by Anh HOANG.

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