Morningstar | Trustpower Offers a Solid Dividend Yield, But Don't Expect Much Earnings Growth
Trustpower generates and supplies electricity to residential, commercial, and industrial consumers. It is considered to have a narrow economic moat, underpinned by its low-cost hydroelectric assets and the efficiently scaled electricity market. The electricity market in New Zealand can be volatile, driven by hydrology conditions, retail competition, and surplus capacity. Trustpower has done a credible job of managing this volatility by hedging its electricity exposure and gradually lifting its own generation capacity. This, coupled with high service levels, good project execution, and innovation, has enabled Trustpower to achieve strong growth during the past decade. Growth opportunities come from its retail multiproduct growth strategy in New Zealand. Liquidity in Trustpower shares is affected by the very low free float of near 22%.Trustpower is an electric power generation and retail group based in New Zealand. Co. and its subsidiaries are engaged in the development, ownership and operation of electricity generation facilities from renewable energy sources and the retail sale of electricity and telecommunications services to its customers. Co. owns and maintains 36 small to medium size Hydro Generating Stations and two Wind Farms, with a further Wind Farm in South Australia. Co. is engaged in the production of electricity from renewable sources and its power stations produce enough electricity for around 220,000 New Zealand households.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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