FirstEnergy CorporationFE

Morningstar Rating

Stock Research and Analysis

by Travis Miller

After years of legal, political, and regulatory debate, Ohio utility regulators finally have agreed to a patchwork plan to implement utility deregulation. It was decided in early 2009 that all of FirstEnergy's power plants will be able to sell at market Read more

Bulls Say

FirstEnergy's low-cost nuclear and coal-fired power plants remain a key advantage in the cost-sensitive utility industry.

Ohio's regulatory structure has been redefined in a constructive manner, which removes a significant source of uncertainty and gives FirstEnergy long-term upside potential.

Some of FirstEnergy's units have the ability to burn Powder River Basin coal, a relatively cheap grade, which adds to the firm's pricing flexibility.

FirstEnergy has raised its dividend from $1.65 per share in 2005 to $2.20 per share in 2009. Read more

Bears Say

Execution remains a key risk in 2009 as FirstEnergy seeks to cut costs and advance a number of key maintenance projects at its power plants.

FirstEnergy is not among the largest nuclear operators, which means it will not have the same sort of economies of scale as Exelon EXC or Entergy ETR.

Its coal plants emit large amounts of carbon dioxide, which could be taxed or capped under legislative proposals in Congress to limit greenhouse gases. Read more

Strategy

Management's overarching priority remains streamlining operations and increasing efficiencies at its power plants, especially its nuclear plants. Low-cost coal and nuclear power plants can generate substantial Read more

Management

President and CEO Anthony Alexander has been with FirstEnergy since 1972. Mark Clark assumed the CFO role in 2009 from Richard Marsh, who had been with the company 29 years. We expect a smooth transition. Although we think Alexander and other senior Read more

Profile

FirstEnergy owns seven electric utility operating companies serving about 4.5 million customers in Ohio, Pennsylvania, and New Jersey. The company's 14,200 megawatts of Read more

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