On Jan 14, 2014, Zacks Investment Research upgraded South
Korean utility major,
Korea Electric Power Corporation
) to a Zacks Rank #1 (Strong Buy).
KOREA ELEC PWR (KEP): Free Stock Analysis
NATL GRID -ADR (NGG): Free Stock Analysis
NRG YIELD INC-A (NYLD): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
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Why the Upgrade?
Korea Electric Power is the dominant player in Korea's
electricity sector. It continues to be well-positioned to
capitalize on growth opportunities in this market and to benefit
from the industry restructuring initiatives of the Korean
government. It has an installed capacity of 68,848 megawatt (MW),
or 88.8% of South Korea's installed generating capacity, and the
entire transmission-cum-distribution capacity.
Its growth story will be bolstered by higher electricity tariff
rates, higher electricity volume sales, an improving overseas
business and a recent regulatory approval for the fuel cost
Recently, South Korea said that it will increase electricity
prices and impose taxes on the use of thermal coal in power
plants. This move is essential to balance the country's rising
power demand and the supply scenario. In Nov 2013, Korea Electric
Power was allowed to lift electricity rates by an average 5.4%.
The previous rise took place in Jan 2013 of around 4.0%.
South Korea has the sixth-largest installed capacity of nuclear
power in the world. Currently, 23 reactors generate one third of
South Korea's electricity and it has five more under
construction. This comprised 29.8% of South Korea's total
electrical generation capacity in 2012. The plan, reaffirmed in
mid 2011, is to provide 59% of electricity from 40 units by 2030.
The company is also proactive with 99 overseas projects in a wide
range of areas, including nuclear power, hydro and thermoelectric
power, transmission and distribution, renewable energy, and
We believe these strong fundamentals have led to the rank
Other Stocks to Consider
Apart from Korea Electric Power, one can also look at
better-ranked players in the electric utility sector like
Wisconsin Energy Corp.
National Grid plc
NRG Yield, Inc.
). All the stocks sport a Zacks Rank #1 (Strong Buy).