Getting in the Green with DPL

As utility company DPL, Inc. (DPL - Analyst Report) continues to benefit from its stable regulated electric power operations, investors may take comfort in its strategic shift away from volatile, unregulated businesses and focus towards environment-friendly power.

The liquidation of the company’s investment portfolio provides sufficient capital for expanding its operating base, reducing debt and interest expense, buying back stock and/or increasing its dividend. However, lower gross margins, ongoing investigations by the SEC and the IRS, and uncertainty over the successful allocation of new capital toward greater earnings power remain concerns.

Accordingly, we maintain a Buy rating and a six-month target price of $30.75 on DPL. Price appreciation to our near-term valuation target, coupled with the recently increased $0.275 per share quarterly cash dividend which we deem sustainable and secure represents annualized total return potential of 23.5%.

Read the full analyst report on DPL.