Dividends Steady Despite High Fuel Costs

Article Excerpt

ALLIANT ENERGY CORP. $36 (New York symbol LNT; Income Portfolio, Utilities sector; WSSF Rating: Average) supplies electricity and gas to over 1.4 million customers in four Midwestern states. It also provides engineering and consulting services to other utilities. In the three months ended June 30, 2006, Alliant earned $0.39 a share (total $46.1 million) before unusual items, down 4.9% from $0.41 a share ($47.5 million) a year earlier. Revenue slipped to $696.8 million from $699.8 million. Thanks to recent asset sales, capital expenditures should drop from $4.51 a share in 2005 to $4.00 in 2006. However, new investments in wind power will probably increase capital spending to $5.00 in 2007. Alliant should generate $5.25 a share in cash flow in 2006, and pay $1.15 in dividends (3.2% yield). It also plans to buy back $200 million worth of its stock. Consequently, it will probably have to borrow the cash it needs. However, long-term debt is a reasonable 0.6 times equity, and its regulated…

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