Fpl Case
Subject: Investment Recommendation on FPL
Date: 3/5/2013
FPL is one of the largest utility companies in Florida and the fourth largest in the country. The company has continuously had great financial quarters while offering one of the highest dividend amounts in its industry. 1993 was a record year for FPL with $514 million in net come and dividends amounting for $2.75 per share. With operating efficiency continuing to improve as time goes on, the company looks like it has a positive future.
Important Issues
The main issues facing FPL and its investors are if the company will be raising its dividend amount or keep it at the same level as it currently is. Also how will the competitors in the industry going to affect FPL’s returns depending on if the electricity market in Florida is deregulated. Other issues that face FPL is with regards to the subsidiary holdings that are not involved in electricity. Several of the recent acquisitions have caused large losses for FPL and have hurt the bottom line of the company. With loses of over $250 million since being acquired Colonial Penn has hurt the net income of FPL. Furthermore, the management style that allows for better quality control has seen to be starting to cause some …show more content…
Investors favor dividends because it will reduce uncertainty with their investments and make them confident in the company’s return. Another factor is financial needs; in FPL’s case the company should cut back on dividends in order to increase profit. Companies need to be aware of the financial needs of the company whether it means to offer dividends or reinvest money back into company for growth. Finally there is liquidity factor should be considered to see if the company is able to payout the actual cash dividends. Sometimes companies have good earnings but are unable to carry out the cash to account for the
Date: 3/5/2013
FPL is one of the largest utility companies in Florida and the fourth largest in the country. The company has continuously had great financial quarters while offering one of the highest dividend amounts in its industry. 1993 was a record year for FPL with $514 million in net come and dividends amounting for $2.75 per share. With operating efficiency continuing to improve as time goes on, the company looks like it has a positive future.
Important Issues
The main issues facing FPL and its investors are if the company will be raising its dividend amount or keep it at the same level as it currently is. Also how will the competitors in the industry going to affect FPL’s returns depending on if the electricity market in Florida is deregulated. Other issues that face FPL is with regards to the subsidiary holdings that are not involved in electricity. Several of the recent acquisitions have caused large losses for FPL and have hurt the bottom line of the company. With loses of over $250 million since being acquired Colonial Penn has hurt the net income of FPL. Furthermore, the management style that allows for better quality control has seen to be starting to cause some …show more content…
Investors favor dividends because it will reduce uncertainty with their investments and make them confident in the company’s return. Another factor is financial needs; in FPL’s case the company should cut back on dividends in order to increase profit. Companies need to be aware of the financial needs of the company whether it means to offer dividends or reinvest money back into company for growth. Finally there is liquidity factor should be considered to see if the company is able to payout the actual cash dividends. Sometimes companies have good earnings but are unable to carry out the cash to account for the