DTE Energy Holding CompanyDTE

Morningstar Rating

Stock Research and Analysis

by Mark Barnett

The future looks brighter for DTE Energy after Michigan legislators reversed years of regulatory muddle with broad utility reform legislation in 2008. Although the reforms should foster a much-improved ratemaking process, we aren't convinced that the Read more

Bulls Say

DTE pays a healthy dividend, yielding roughly 5% at our fair value estimate.

Major regulatory reforms were signed into law in 2008, providing for a streamlined ratemaking process and quicker, more reliable cost recovery.

Michigan's aging utility infrastructure needs investment, which could mean growth opportunities for DTE.

We think management's move toward a more pure-play utility business model is a wise one. The legislative reforms will help DTE put cash from nonregulated divestitures to good work. Read more

Bears Say

DTE self-implemented a $280 million rate increase in 2009 that could lead to a refund to customers and a charge to earnings in 2010 if regulators don't shift their position.

Michigan's economy continues to struggle, which will increase pressure on regulators to keep electric and gas rates low at utilities' expense.

DTE's nonregulated businesses constitute a significant portion of earnings, making the company a riskier investment than other utilities.

Utilities tend to suffer in times of high inflation, as inflation erodes the earnings power of a utility's rate base and regulatory relief can be slow to catch up. Read more

Strategy

To prepare for what could be a decade of utility infrastructure growth in Michigan based on new laws and regulations, DTE is selling nonregulated operations and planning billions in utility investments Read more

Management

Almost all of DTE's executives have been with the company since Michigan deregulated its utilities in 1997. That includes CEO and chairman Anthony Earley Jr., who took the top executive spot in 1998. Earley has become an outspoken advocate for regulatory Read more

Profile

DTE Energy owns two regulated utilities, Detroit Edison and MichCon. Detroit Edison is the nation's 10th-largest electric utility, supplying energy to 2.2 million customers Read more

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