The Dow Jones Utility Average is up about 25% from its March low, roughly half the gain of the S&P 500. But year to date, the utility index is flat, versus the S&P's 15% rise. Stocks such as Southern Co. (SO), American Electric Power (AEP), Entergy (ETR) and Exelon (EXC) are down in 2009.

From a recent Mad Money show:"It's OK, it's not great. But we've got Dominion Resources (D) with a dividend, a great management and a lot of renewable energy."

New Orleans-based Entergy, with a market capitalization of $15.7 billion, trades for a modest 11 times 2009 earnings estimates of $7.50 a share. Hilliard Lyons has a 12-month price target of $100, or 25% above the recent stock price of $80. The stock is down 34% in the past 12 months. J. Wayne Leonard, Entergy's CEO, who brought the company back from the brink when he joined 10 years ago, says Entergy delivered the highest total shareholder return -- 414.3% -- of any company in its industry for the nine years ended Dec. 31, 2007. Moreover, Entergy has articulated a goal of reducing its carbon emission to 20% below its 2000 level by the end of this decade. The company, whose operating earnings rose 22% in 2007 to $5.76 a share, is expected to earn $6.60 a share for 2008, 15% above the current price.

Zach Karabell recommends nuclear energy which he thinks is starting to shrug off its negative image. He suggests playing it with, The Shaw Group [SGR], Exelon [EXC], or Entergy [ETR].

growth & dividends

18% gas & oil combined

Entergy is an integrated energy company with three primary businesses: a regulated utility that distributes power and gas across a 4-state area; a non-utility nuclear division that sells power into the northeast merchant market (it currently has an enormous cost advantage over gas-fired plants and may be spun off); and an energy commodity services division that generates and sells non-nuclear wholesale power. The company mitigates merchant generation risk by selling its output in long-term power-purchase agreements.

From a recent Mad Money show:

"Cheap power producer. I like it. It's a cheap energy provider. It's got nuclear. I like Exelon (EXC) and Consolidated Edison (ED) more though."

Hold - Price 112.54 on April 29
by Jefferies & Co.

Entergy [looks] fairly valued based on [discounted cash flow] and [enterprise value/earnings before interest, taxes, depreciation and amortization] valuation. While we remain bullish on the New York/New England wholesale power markets...we believe this is largely priced into the stock. Based on alternative EV/Ebitda valuation, our target is 119. Entergy...still [sees] September for completion of Enexus spinoff [even with likely wait for regulatory approval]. Market cap: $22.2 billion.

Entergy (ETR) was downgraded at Jefferies. Rating lowered to Hold from Buy. Maintains $116 price target and 2008 EPS estimates of $6.80.

From Barron's 4/17/07

"Operators in regulated electricity markets probably will be allowed to recover the higher costs of uranium via higher rates for customers. But nuclear operators in competitive markets, like Exelon, Entergy, FPL Group (FPL) and Dominion Resources (D), will see higher fuel costs deplete profit margins."