Morningstar Rating

Stock Research and Analysis

by Mark Barnett

Bulls Say

Healthy and consistent regulated cash flows give the company room for modest dividend increases.
Brownfield gas storage sites provide AGL with an attractive opportunity for growth should storage fundamentals recover, with room for expansion at the Central Valley, Golden Triangle, Jefferson Island, and Sawgrass sites if markets recover.
Decoupled rate structures in Georgia, its largest territory, and Virginia make AGL one of the steadier performers in the industry. Read more 

Bears Say

While decoupled rate structures ensure more stable results, they inhibit a utility company's ability to generate abnormally high returns.
We think AGL diluted the quality of its overall regulatory environment with the Nicor acquisition and could face a rude surprise when it is finally able to go in for a full rate case.
The push for new storage development could not have happened at a worse time for storage fundamentals, as rates for AGL's facilities continue to plummet. Read more 

Management

We believe AGL's stewardship of investors' capital had been good, but we are worried that the Nicor deal was an exercise in empire-building and that returns on invested capital will suffer, and we are wary of possible further acquisitions. AGL has improved   Read more 

Profile

AGL Resources is an energy services holding company with regulated natural gas utilities in Florida, Georgia, Illinois, Maryland, New Jersey, Tennessee, and Virginia. Its   Read more 

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