Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Thematic (Sector/Industry)

New Zealand's vertically integrated electricity generator/retailers, or "gentailers", are high-quality businesses. The most attractive at present is <a href="https://www.smartkarma.com/entities/13136" target="_blank" data-smartkarma-citation="entities:13136:1">Contact Energy Ltd (CEN NZ)</a>, which is cheaper than <a href="https://www.smartkarma.com/entities/4327" target="_blank" data-smartkarma-citation="entities:4327:1">Meridian Energy Ltd (MEL NZ)</a> and <a href="https://www.smartkarma.com/entities/9933" target="_blank" data-smartkarma-citation="entities:9933:1">Mercury NZ Ltd (MCY NZ)</a>, lower-risk than <a href="https://www.smartkarma.com/entities/4227" target="_blank" data-smartkarma-citation="entities:4227:1">Genesis Energy Ltd (GNE NZ)</a>, and better-quality than <a href="https://www.smartkarma.com/entities/11489" target="_blank" data-smartkarma-citation="entities:11489:1">Trustpower Ltd (TPW NZ)</a>, in our opinion. While the near-term outlook is depressed by generation oversupply and intense retail competition, Contact should increase earnings on cost reductions, changes to transmission pricing, and the eventual recovery of the wholesale price. It trades on a low EBITDA multiple, and one that's based on current depressed earnings. We expect the discount to our fair value estimate to close as earnings improve, potentially aided by an expansion of the firm's EBITDA multiple towards peers. In the meantime, investors receive a relatively attractive dividend yield of around 5%, with material upside in coming years, predominantly from a higher dividend payout ratio. We believe the market is too focused on soft near-term fundamentals, providing a good opportunity for patient investors.Analysts: Adrian Atkins and Angus Hewitt

New Zealand's vertically integrated electricity generator/retailers, or "gentailers", are high-quality businesses. The most attractive at present is Contact Energy Ltd (CEN NZ), which is cheaper than Meridian Energy Ltd (MEL NZ) and Mercury NZ Ltd (MCY NZ), lower-risk than Genesis Energy Ltd (GNE NZ), and better-quality than Trustpower Ltd (TPW NZ), in our opinion. While the near-term outlook is depressed by generation oversupply and intense retail competition, Contact should increase earnings on cost reductions, changes to transmission pricing, and the eventual recovery of the wholesale price. It trades on a low EBITDA multiple, and one that's based on current depressed earnings. We expect the discount to our fair value estimate to close as earnings improve, potentially aided by an expansion of the firm's EBITDA multiple towards peers. In the meantime, investors receive a relatively attractive dividend yield of around 5%, with material upside in coming years, predominantly from a higher dividend payout ratio. We believe the market is too focused on soft near-term fundamentals, providing a good opportunity for patient investors.Analysts: Adrian Atkins and Angus Hewitt

Don't Be Shortsighted on New Zealand's Oversupplied Energy Market

New Zealand

Genesis Energy Ltd. generates, transports, and retails electricity. The Company owns and operates hydroelectric generating stations to produce electricity, as well as explores natural gas and bottled liquefied petroleum gas.

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Genesis Energy (GNE NZ)

Don't Be Shortsighted on New Zealand's Oversupplied Energy Market

New Zealand's vertically integrated electricity generator/retailers, or "gentailers", are high-quality businesses. The most attractive at present...

Morningstar, Inc.

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