Questions Arise When Companies Move Away from Core Geographies

I have been optimistic about the future of PSE&G (NYSE: PEG  )  and its efforts to modernize. However, is the company's move to buy two solar plants totaling 4.4MW from Canadian Solar (NASDAQ: CSIQ  ) through its PSE&G Solar Source subsidiary a sign that maybe the growth expectations in the New Jersey area won't be as strong as I was thinking? The company just took over the Long Island, NY, power operations from LIPA at the start of 2014, so with the expansion of solar in Northern California's Shasta County, could PSE&G be making a mistake by leaving its core area of operations? I like the diversity but fear the move is ill-timed with so much happening back in its home service area and management still waiting for a decision on the proposed $3.9 billion "Energy Strong" modernization initiative. 

Previously, PSE&G Solar Source, which falls under the company's PSE&G Energy Holdings division, has worked with partner Juwi Solar to develop five solar projects totaling 69.2 MW but only one (Phoenix, AZ) is located out west (the others are in Florida, Ohio, Delaware, and New Jersey). In PSE&G's November 19th marketing materials for the Barclays European Investor Meetings, the company dedicated two full slides to the company's locational advantage to shale deposits in Pennsylvania and Ohio as well as strategic pipeline and storage capacity. So it is a bit of head-scratcher to see the company spend money to boost its solar presence outside its core area of operations. PSE&G Energy Holdings may be a small part of PSE&G's overall operating earnings at ~1.2%, but it's going to take a lot of capital to acquire new assets for this sector, and that begs the question, is it worth growing?

Dividends can make you rich

One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2790761, ~/Articles/ArticleHandler.aspx, 9/2/2015 3:07:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

John Licata

John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. You can follow John on Twitter @bluephoenixinc

Today's Market

updated Moments ago Sponsored by:
DOW 16,237.33 178.98 1.11%
S&P 500 1,933.50 19.65 1.03%
NASD 4,700.18 64.08 1.38%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 2:51 PM
CSIQ $18.17 Up +0.16 +0.89%
Canadian Solar, In… CAPS Rating: **
PEG $38.79 Down -0.19 -0.49%
Public Service Ent… CAPS Rating: ****