Lights On at ITC Holdings
ITC Holdings Corp. (ITC Holdings) is in the electricity transmission business. They operate transmission lines in the mid-western US that connect generating stations to local distribution facilities. The Company’s Regulated Operating Subsidiaries earn revenues through tariff rates charged for the use of their electric transmission systems by its customers, which include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers.
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This utility stands apart from its peers because its earnings have been growing at a rate of 17.1% per yr. Utilities are attractive because they have long term contracts with which give them the benefit of a high degree of earnings predictability.
S&P has a 5star rating and a target of $109. We recommend a full position. Purple Chips 12 -18 month target: $USD 105.00
LOW VALUATION IN ITC HOLDINGS AT $USD 91.00 (ITC, $90.75) FULL POSITION
PURPLE CHIPS TARGET: $105.00 POSITION SIZE: FULL (5.0%) P/E: 19.4X DIV: $1.70 (1.9%) MKT CAP: $4.7B Debt:$3.5B RETURN ON CAPITAL: 11.3% EARNINGS YIELD: 5.9% 5 YR EPS Growth rate*:17.1% P/E/G Ratio: 1.19X EPS: $4.67 2014 EST.: $5.58 2015 EST.: $6.36
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
