Xcel Energy IncXEL

Morningstar Rating

Stock Research and Analysis

by Travis Miller

With operations stretching from northern Minnesota to Texas, the favorable geography of Xcel Energy's service territories has allowed it to become an environmental leader, a focus it hopes will persuade regulators to boost--or at least sustain--its Read more

Bulls Say

We like that the board accelerated dividend growth in May 2012 to $1.08 per share annualized.

Renewable portfolio standards in Minnesota and Colorado should smooth regulatory approval for wind and transmission projects.

Environmental awareness in Minnesota and Colorado should drive investment opportunities in environmentally friendly energy.

Increased natural gas use because of its relatively low carbon profile could boost gas utility earnings and electric utility investment opportunities. Read more

Bears Say

Now that Xcel derives all of its earnings from regulated subsidiaries, state regulators hold the power to determine shareholder returns.

Emissions regulations could make Xcel's low-cost coal plants, which produce more than half of the company's total power, more expensive for customers.

Energy-efficiency improvements in building construction and appliances could lead to flat or negative demand growth.

If energy usage wanes during the economic slowdown, Xcel could underearn its allowed returns.

Falling interest rates could lead regulators to cut allowed returns. Read more

Management

A critical element to producing sufficient shareholder returns for utilities investors is achieving constructive regulatory outcomes. Xcel's management has shown its acumen at regulatory relations across one of the most diverse service territories of Read more

Profile

Xcel Energy manages four utilities serving 3.4 million electric customers and 1.9 million natural gas customers in eight states. Its utilities are Northern States Power, Read more