I just purchased a block of MGEE, my local utility. In the big picture of utilities MGEE is a very tiny player. Their daily volume is fairly low.
Over the last 5 years MGEE has traded from a low of 28 (Mar 2009) to a high of 38 (June 05). The 52 week low is 32.36. I bought at 34.36 on June 7 and it has had a nice short term run up here to 36.35 as of yesterday. But I am not overly concerned about the value of the stock in this case. I treat this one as fixed income. Even in the lowest of the low market back in March of ’09 the stock didn’t really tank. That is a great indicator of a solid company that people really love (for whatever reason). Yearly dividends are 1.47, making the yield about 4.05% as it stands right now.
I like this one as a safe long term play and treat it almost like a bond in my allocation. I do think there is upside potential as this area wasn’t hit as bad as places like Michigan or Arizona in the recession, and there is always a chance that this tiny utility could get swallowed by one of the other giants. One thing that is nice from a small retail investors perspective is that you can buy their stock directly if you choose, and you can sign up for this service at the MGEE website. On the other hand, you will never get rich if you are waiting for a stock like this to rocket up.
Madison Gas and Electric has a sparkling reputation here in Madison, home of tons of hippies and enviro weenies. If a company can do their business relatively uninterrupted in this environment, it really says something to me. I will more than likely be plowing more into this one in the years to come, keeping track of it in my fixed income side even though it is a stock.