Scana CorporationSCG

Morningstar Rating

Stock Research and Analysis

by Travis Miller

Long known as a reliable dividend payer with steady growth, this 82-year-old regulated utility is elevating its growth and risk profile with plans for large capital investments to serve its growing customer base. Although we think SCANA's investment Read more

Bulls Say

SCANA has a regulated monopoly in a fast-growing region of the country--every utility's desired scenario.

Nearly 25% of SCANA's power generation is from hydro and nuclear sources, reducing its exposure to environmental concerns and providing cheap power for residents.

SCANA's North Carolina gas subsidiary continues winning rate increases, boosting returns in that business.

Consistent cash flows have allowed SCANA to raise its dividend from $1.46 per share to $1.88 since 2005.

State legislation requires favorable rate structures for large capital projects such as SCANA's $6.3 billion proposed nuclear plant. Read more

Bears Say

Nuclear plant cost overruns, which were commonplace during the last round of U.S. nuclear plant construction in the 1970s, could significantly impair equity returns.

Regulated utilities like SCANA are at the mercy of state regulators and public outcry. Unfavorable rates could have a significant impact on performance.

Rising interest rates have a twofold negative effect: increased capital costs for investment and a less attractive dividend yield.

Rising commodity and labor costs for large infrastructure projects could hurt returns if regulators do not allow SCANA to pass along the higher costs. Read more

Strategy

In response to environmental concerns and growing power needs, SCANA is redoubling its efforts in low-carbon energy. This should help reduce energy costs for customers, especially if the U.S. government Read more

Management

Chairman and CEO William B. Timmerman, 62, has been with the firm for 30 years and is surrounded by other executives with long tenures. But we wonder about the company's future as he nears retirement age. The board sent former CFO Kevin Marsh, 53, to Read more

Profile

SCANA is a registered holding company engaged primarily in generating, transmitting, and distributing electricity in South Carolina. It also purchases, transmits, distributes, Read more

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