In 2007, President George W. Bush developed a plan that would reduce gasoline usage by over 20% in the next ten years, and with both major presidential candidates making alternative energy a priority in the upcoming election; electric cars may be commonplace on our nation’s highways in the near future.
What does this mean for investors? As the number of electric powered cars increase, expect utility companies to get in on the action. Companies that operate as an electric utility and a renewable energy company offer investors a “two for one” opportunity.
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These utility companies may supercharge your portfolio as they charge the cars of the future.
EDISON INTERNATIONAL (EIX)
Edison International supplies electricity to more than 13 million customers in central, coastal and southern California. EIX invests in energy and infrastructure projects including electric transmission and power generation and distribution. EIX is under considerable pressure to invest in short-term and long-term energy solutions, such as purchasing renewable energy for current distribution and developing renewable energy generation projects. Currently trading near its 52-week low, Edison International presents an excellent covered calls investing opportunity. For Edison International, a covered calls investing position for October stock options expiration is available with a potential return of 2.1% and 4.1% downside protection. As long as Edison’s stock price does not drop more than 4.1% at stock options expiration in October – 44 days, the position will be profitable.
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PACIFIC GAS & ELECTRIC COMPANY (PCG)
California leads the way in renewable energy solutions, so it’s no surprise another California utility company stands to gain from the rising popularity of electric cars. Even more progressive in its quest for clean energy than its southern neighbors, Pacific Gas & Electric has indicated it will procure at least 10% of its energy from renewable sources by 2010. Pacific stock has held steady over the past year despite general market upheaval and appears low risk with a good chance at high rewards. PG&E currently has a covered calls position for October stock options expiration with a potential return of 2.2% – only 44 days.
PPL CORPORATION (PPL)
Californians aren’t the only ones concerned about the environment. PPL Corporation engages in the generation, transmission and distribution of electricity primarily in the Northeastern and Western United States. Currently serving over 4 million customers, PPL has taken the lead in renewable energy by offering incentives for green construction and has been a strong supporter of renewable energy. Currently trading 10% off its 52-week high, PPL looks like a potentially good covered call investing play for the short and long term. PPL Corporation currently has a covered calls position for October stock options expiration with a potential return of 1.9%.
FLORIDA POWER and LIGHT (FPL) FPL Group Inc. serves over 4.5 million customers in Eastern Florida. On the cutting edge in wind, gas, and solar power, FPL has been a leader in renewable energy development for over a decade. There’s no reason to doubt they’ll continue their interest in clean energy once electric vehicles become more popular. Currently trading well off its 52-week high, Florida Power and Light offers an excellent covered calls investing opportunity. A covered call investing position is currently available for FPL Group for October stock options expiration with a potential return of 2.7% and 5.1% downside protection. As long as FPL Group’s stock price does not drop more than 5.1% at stock options expiration in October – 44 days, the position will be profitable.
DUKE ENERGY CORPORATION (DUK)
Duke Energy Corporation sells electricity in parts of five states, offering on site energy services, wholesale marketing of electric power, and the development and implementation of customized energy solutions. Duke has recently proposed a $100 million dollar expansion of solar panels on 850 buildings in North Carolina, staking its claim as a leader in renewable energy. Don’t expect that to change as electric cars become more prevalent. Duke stock has declined slightly over the past year and looks to be a solid covered calls investment in the upcoming months. A covered call investing stock options position is currently available for Duke Energy for October stock options expiration with a potential return of 2.1%.
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