RE:RE:10 year chart is horribleDeanEdmonton wrote: I think higher interest rates are alreay priced into most of the ultilites/pipeline stocks. To me, with 5 to 8% dividend yeilds, the Utilities are one of the last underpriced sectors. Aside from REITS pretty much everything else is fully to well over valued.
The 10 year chart supports your view. In 2014-2015, 10 year bond rates were between 2% and 2.5%, CU's dividend was $1.07 per share, yet the share price was around $30.
With the Fed set on keeping rock bottom rates for the next two years, I can't see the 10 year bonds rising that much. The chart clearly supports a $30 share price with 10 year bond rates ranging from 2% to 2.5%.
Also, as they mentioned in the CC, transactions on the market are happening at 2x regulated assets base (I can confirm transactions happening at 1.9 to 2x regulated assets base). That would give CC a market value of over $29B since assets base is $14.8B. That would put the value of equity around $15B compared to the current market cap of $8.2B. The share value based on latest M&A prices on the market would be over $55.