Senior Managing Director Gregory Phelps of John Hancock Asset Management says his firm has a large holding in Northeast Utilities System (NU), which he says is one of the best in the industry as a largely transmission distribution utility.
“We actually have a fairly big holding in that because we owned both the common stock of Northeast Utilities and the common stock of NSTAR, which was Boston Edison before they merged a couple of years ago. We liked both companies very much,” Phelps said.
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Phelps says he likes Northeast Utilities‘ growth because the company has a lot of transmission projects they are working on, and transmission lines tend to have higher allowed return on equity by regulators. Additionally, they have announced a major natural gas pipeline project which brings gas from the shale plays in Ohio into the Northeast.
“So the company is really focusing on building out energy infrastructure, which carries very nice allowed return on equity by regulators. To us that’s the epitome of a very low-risk-type utility that has above-average earnings growth and dividend growth,” Phelps said.
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