European utilities have been hit hard in the past few years. Many of the utilities are down significantly. For deep- value bargain hunters this sector offers opportunities at current levels. The following are the five largest European utilities (excl. U.K.) based on revenues:
1.Company: RWE AG (RWEOY)
Current Dividend Yield: 5.97%
Five year return (excluding dividends): -73%
2.Company: E.ON SE (EONGY)
Current Dividend Yield: 4.27%
Five year return (excluding dividends): -55%
Five year return (excluding dividends):
3. Company:Electricite de France SA (ECIFY)
Current Dividend Yield: 6.30%
Five year return (excluding dividends): -44%
4. Company: Engie (ENGIY)
Current Dividend Yield: 6.23%
Five year return (excluding dividends): -39%
5.Company:Enel SpA (ENLAY)
Current Dividend Yield: 3.34%
Five year return (excluding dividends): -0.40%
Note: Dividend yields noted above are as of Aug 14, 2015. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.
Here are a few points from a research report by Horizon Kinetics LLC:
- While the DAX Index shot up by over 55% between Jan 2010 and Oct 2014, E.ON and RWE declined by over 55% and 59% (price wise) respectively. This is indeed surprising since the actual loss can be considered as over 100% relative to the performance of the overall market.
- E.ON is the largest utility in Europe based on revenues.
- GDF Suez is the largest French utility with a strong presence in the UK market.
- Italy’s Enel is Europe’s third largest utility.
- Compared all the above firms. Britain’s Centrica plc (CPYYY) was up by 36% during the same period. This is because, unlike the top five companies, Centrica is much more diversified including with operations in Canada and the US.
Source: Electric Utilities:Perhaps not the Investment One Expects, Horizon Kinetics LLC
Disclosure: Long EONGY, RWEOY