Don't Fret This Clean Company's Dividend Cut

EXC: Well-diversified and becoming more stable to drive growth
As the nation moves increasingly toward clean energy, one company in this space that is perfectly positioned to capitalize on having the largest nuclear fleet in North America is Exelon. This strength combined with an increased focus on renewable energy, along with its recent merger with Constellation, puts Exelon and its best-in-class dividend on a short list of top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.

After hinting at it late in 2012, Exelon (NYSE: EXC  ) finally announced its decision to cut its industry-leading dividend rate. Starting in the second quarter of 2013, investors will receive $0.31 per share rather than the current $0.525 per share. While this might seem a bit steep, investors must consider management's reasoning behind the cut before jumping to rash conclusions. In this case, Motley Fool energy analyst Taylor Muckerman believes it puts Exelon in a much more sustainable position to grow competitively compared to its peers. Foolish investors should check out the video below for his take on why this could be a great long-term investment.

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  • Report this Comment On February 07, 2013, at 5:38 PM, NHoldway wrote:

    So, the Fool's Inside Value newsletter just issued a Sell recommendation on Exelon. What now?

  • Report this Comment On February 07, 2013, at 10:03 PM, TMFrunAMuck wrote:

    @NHoldway - First, thank you for being a valuable member to one of our successful services.

    With regards to the divergence in viewpoints on Exelon, investing is an individual game. After reading over the Inside Value SELL rec, there are a couple of things that I agree with. However, several points, in my opinion, still make Exelon a long-term BUY.

    Yes, its dividend was cut, but as my video states, I believe this was for prudent reasons that will position EXC for the clean energy future. It will provided mgmt with better access to the debt markets and will help fund growth projects like the one with FSLR that I mentioned.

    With regards to the mgmt decisions mentioned in the IV piece, the majority of the actions were taken by John Rowe who left the company when the Constellation merger closed in March. Chris Crane is now at the helm, and I believe they have vastly different mgmt styles.

    Lastly, natural gas prices have remained low much longer than most expected. When the price rises, and it inevitably will, EXC is in great position to reap the benefits of rising energy prices due to its best-in-industry clean, renewable portfolio.

    Thank you for your comment, and I hope my points help round out my personal view on EXC. While, it may differ from IV's, it is my honest opinion of the stock.

  • Report this Comment On March 18, 2013, at 5:40 AM, thidmark wrote:

    NEW klee er

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