On Jan 16, 2014, Pivotal LNG, an affiliate of the energy
services holding company,
AGL Resources Inc.
), inked a deal with
United Parcel Service, Inc.
) to supply liquefied natural gas (LNG) to the fleet of the
latter in Jacksonville, Fla.
This marks the second LNG contract between the two and the third
UPS facility that Pivotal would be supplying. Under the first LNG
supply contract - signed in Apr 2013 - the AGL Resources
subsidiary supplies LNG to United Parcel's Nashville and
The new LNG deal is in tune with United Parcel's announcement
that it plans to pump up LNG use in its transportation
operations. The wholly owned subsidiary of AGL Resources is a
supplier of LNG across the U.S. Evidently, such plans by UPS to
boost LNG use is a boon for Pivotal.
AGL Resources is a premier electric utility with principal
business of gas distribution. We positively view the company's
relatively low risk earnings growth and an expanding dividend
that yields a solid 4.1%.
However, a few factors go against the company's positive outlook.
The wholesale segment of AGL Resources continues to be less than
favorable. The unit is expected to be under pressure given the
challenging outlook based on narrow spreads for transportation
and storage. Moreover, the company's shipping segment results may
also remain weak in the upcoming quarters.
The AGL Resources stock trades in a 52-week range of 38.86 to
49.31. On Jan 17, the stock closed at $46.87 per share after
reaching an intraday high of $47.04 per share.
Atlanta, Ga.-based AGL Resources currently holds a Zacks Rank #4
(Sell), implying that it is expected to underperform the broader
U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked stocks in the industry
National Fuel Gas Company
). Both these stocks currently have a Zacks Rank #2 (Buy).
AGL RESOURCES (GAS): Free Stock Analysis
NATL FUEL GAS (NFG): Free Stock Analysis
QUESTAR (STR): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis
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