ESOCF - Endesa's Regulated Businesses Weather Inflation And We Believe In Nuclear

• Regulated utilities, despite their issues, are resistant to inflation due to in-built mechanisms for remuneration.
• In generation, Endesa has substantial nuclear assets, which explains its discount.
• In an inflationary environment, we like commodities, including electricity, and we think that nuclear will have to be appreciated as necessary eventually by the renewable crowd.
• With a substantial dividend yield also forming part of the appeal of this stock, we see only political risks, largely priced in, being the only ones facing Endesa.
• As such, we think it is a speculative buy to which we intend to have some small exposure.

For further details see: