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The harsh winter on the East Coast may have frustrated New Englanders, but shareholders of Northeast Utilities (NU - Analyst Report) aren't complaining. On May 5, NU reported better than expected first quarter results due in large part to much colder weather.

Earnings per share came at 69 cents, 10% above the Zacks Consensus Estimate, marking the company's third straight earnings beat.

The company has also been consistently raising its dividend - a dividend that currently yields a solid 3.1%. It is a Zacks #2 Rank (Buy) stock.

First Quarter Results

On May 5, Northeast Utilities reported first quarter earnings per share of 69 cents, beating the Zacks Consensus Estimate by 6 cents, as the company benefited from much colder weather.

Operating revenues declined 8%, which was more than offset by a 9% decrease in operating expenses. Overall, operating income was up slightly year-over-year.

Meanwhile, cash flow from operations soared 65% over the same quarter in 2010.

Reaffirmed Guidance

Management reiterated its guidance of $2.25 to $2.40 per share in the first quarter press release. The Zacks Consensus Estimate is within this range at $2.31, representing 5% growth over 2010 EPS.

The 2012 consensus estimate is currently $2.46 per share, corresponding to 6% EPS growth. It is a Zacks #2 Rank (Buy) stock.

3.1% Dividend

Northeastern pays a dividend that yields an attractive 3.1%. The company has a solid history of consistently raising its dividend. Over the last 10 years, NU has raised its dividend at a compound annual growth rate of 10.6%.

The company most recently raised its dividend 7% to 27.5 cents per share.

Valuation

Shares of NU are currently trading at 15.1x 12-month forward earnings, a slight premium to its 10-year median of 14.2x, but a significant discount to the industry average of 29.3x.

Northeast Utilities primarily operates through three wholly-owned subsidiaries: The Connecticut Light and Power Company, Public Service Company of New Hampshire, and Western Massachusetts Electric Company.

Read the November 17 article here.

This Week's Growth & Income Zacks Rank Buy Stocks:

United Stationers Inc. (USTR) reported strong first quarter results on April 25 thanks to strong demand and margin improvement. Analysts are projecting solid growth over the next two years, with 20% EPS growth in 2011 and 18% growth in 2012. The company also recently initiated a dividend that yields 1.4%. Read the full article.

Alliance Resource Partners, L.P. (ARLP) recently reported record first quarter revenues and earnings per unit, which came in 9% above the Zacks Consensus Estimate. It was ARLP's second consecutive positive earnings surprise. As the partnership has been posting record financial results, it has also been consistently raising its distributions. It currently yields a juicy 4.9%. Read the full article.

U.S. Physical Therapy, Inc. (USPH) recently delivered its fifth consecutive positive earnings surprise on better than expected revenue. It also recently announced the initiation of a regular quarterly dividend, signaling management's bullish long-term outlook. Read the full article.

Ecolab Inc. (ECL) recently reported better than expected sales and earnings for the first quarter of 2011. Estimates have been moving higher off the strong quarter, sending the stock to a Zacks #2 Rank (Buy). The company is also very shareholder-friendly with 74 consecutive years of dividend payments and a 10-year dividend growth rate of 10.1%. Read the full article.

Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.

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