Students of energy policy have long been familiar with the cry from activists: Government shouldn’t pick the winners and losers.
But the environmental movement, albeit with good intentions, is quite often guilty of that. Collectively, the environmentalists have told the electric utility industry, with varying degrees of vehemence, “We want wind and solar.”
As an afterthought, some environmentalists have acknowledged that there are other options, most notably nuclear and improved storage, and there is the possibility of new technologies or huge improvements in the known ones.
These deserve a hearing in the great sea change now taking place in electricity production.
Electric utilities want to reduce and end carbon emissions. But right now, they’re struggling with the overselling
I see parallels in the current market compared to the tech bubble in the late 1990s, during which solid and defensive income names were passed in favor of high-flying tech names. In this article, I’m focused on AES Corporation (AES), which belongs to the defensive utility sector. I evaluate what makes this an attractive investment at the current valuation. So, let’s get started.
(Source: Company website)
A Look Into AES Corporation
AES Corporation is a Fortune 500 global power company. It provides energy in 14 countries through a diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Last year, the company generated over $10 billion in total revenue. It currently owns and manages $34 billion in total assets and employs 9,000 people globally. AES derives approximately 85% of its revenues from the U.S., with much of the rest coming from Latin America (8%) and Europe (6%).