EDPFY - Energias De Portugal: A Solid 5.2% Yield With An Upside

2024-07-20 02:15:37 ET

Summary

• EDP is an above-average company with impressive margins, a leadership position in renewables, and a global presence in the utility sector.
• Energias de Portugal is a solid investment with good fundamentals and upside potential in a chaotic market.
• The company has a strong institutional shareholding with large players like BlackRock, China Three Gorges Corporation, and Qatar.

Dear subscribers,

It was about 4 months back that I updated my thesis on the shareholding in the Portuguese company, Energias de Portugal (EDPFY). At the time, the company was a 4.5%-yielding attractive utility with a good yield, and a solid investment in what I believe to be a chaotic overall market. The company has a lot of good fundamentals and a lot of upside as well - at the same time that it cannot really be called expensive by any measure. While the company has dropped since my last article, this doesn't faze me (and the fact that it does not should not surprise you fif you follow my work).

The company was founded over 40 years ago as Electricidade de Portugal by the Portuguese government. What the government did was to merge 14 former national energy companies. The company then went through another very comprehensive restructuring in the mid-90s, which also included progressive privatization of the business, which is what has been happening over the past few decades....

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