Alliant Energy Corp. $33 - New York symbol LNT

ALLIANT ENERGY CORP. $33 (New York symbol LNT; Income Portfolio, Utilities sector; Shares outstanding: 110.4 million; Market cap: $3.6 billion; WSSF Rating: Average) supplies electricity and natural gas to customers in Wisconsin, Iowa, Minnesota and Illinois. Recent flooding forced the company to suspend operations at two of its generating stations in Cedar Rapids, Iowa. Although insurance will help cover some of its losses, the company estimates the flood will cut its 2008 earnings by $0.20 a share. To put that estimate in perspective, Alliant earned $0.62 a share (total $68.1 million) in the first quarter of 2008, up 10.7% from $0.56 a share ($65.2 million) a year earlier. Revenue grew 8.7%, to $992.0 million from $912.7 million. Alliant now plans to build a wind farm in southern Minnesota that will generate 400 megawatts of power. The first phase of this project will cost $450 million to $475 million, and generate 200 megawatts by the end of 2010. Wind power is less reliable than traditional power plants. However, this project should help Alliant cut its reliance on coal, natural gas and oil for virtually all of its power. It will also help the company curry favor with regulators and environmentalists. The company should earn $2.60 a share in 2008, excluding non-recurring charges. The stock trades at 12.7 times that estimate. The $1.40 dividend yields 4.2%. Alliant Energy is a buy.

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Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

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Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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