Why Cleco Is Poised to Keep Popping

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, utility holding company Cleco (NYSE: CNL  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Cleco and see what CAPS investors are saying about the stock right now.

Cleco facts

Headquarters (founded)

Pineville, La. (1934)

Market Cap

$2.6 billion

Industry

Electric utilities

Trailing-12-Month Revenue

$993.7 million

Management

CEO Bruce Williamson (since 2011)

CFO Darren Olagues (since 2009)

Return on Equity (average, past 3 years)

15.5%

Cash/Debt

$31.0 million / $1.4 billion

Dividend Yield

3.1%

Competitors

CenterPoint Energy

Entergy

Southern

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 88 members who have rated Cleco believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star TeenStockPicker, tapped the stock as a particularly solid income opportunity:

Cleco operates in two segments: Cleco Power, a regulated electric utility that serves approximately 279,000 customers in Louisiana, and Cleco Midstream, a competitive wholesale generation business. They definitely have a reliable dividend, it has been paid out to investors since 1935, and their payout ratio is currently 45. Last year Cleco gave their future a big boost by signing a 10-year contract to supply power to Dixie Electric Membership Corp. The contract takes effect in early 2014 and analysts have predicted annual earnings growth will increase from 2% to 6% in upcoming years.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its five-star rating, Cleco may not be your top choice.

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