Pepco Holdings, Inc - POM

Pepco Holdings, Inc., stock ticker POM, pays a 27 cent quarterly dividend, which is currently a 5.72% dividend yield. 5.72%! Now if that doesn't get your attention then I really don't know what will. There are not many guarantees in this world, but POM's dividend is a safe and this company should be a cornerstone within your Roth IRA stock retirement portfolio.

Taking a step back, before we continue to discuss POM's sweet, juicy dividend. POM is a holding company that, through regulated public utility subsidiaries, is engaged in the transmission, distribution and default supply of electricity and the distribution and supply of natural gas. Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE) are POM's holdings.

As of December 31, 2011, POM operated in three segments: 1) Power Delivery: consisting of the operations of Pepco, 2) DPL and ACE: engaged primarily in the transmission, distribution and default supply of electricity and the distribution and supply of natural gas. 3) Pepco Energy Services and Other Non-Regulated: consisting of the operations of PCI. Through Pepco Energy Services, Inc. and its subsidiaries (collectively Pepco Energy Services), PHI also provides energy and renewable energy services to Government and institutional customers.

Listed below are Pepco's current POM Statistics:

52 week 16.57 - 20.64
Vol / Avg. 3.53M/2.08M
Market cap 4.30B
P/E 16.43
Div/yield $0.27/5.72%
EPS 1.15
Shares 227.84M
Beta 0.50
Inst. own 56%

In short, POM is a well managed company. They are loaded with cash after their sale of power generation assets to Calpine Corporation CPN for $1.65 billion. POM is a great recession play as well. As we come out of the Great Recession profits should continue to improve for POM.

Simply put, POM is another one of those boring utility companies that delivers electricity and natural gas. POM delivers electricity to Delaware, Maryland, New Jersey, and Washington, DC. It pays a consistent dividend quarter after quarter, year after year. POM's dividend will just not stop as long as people want to heat and light their homes. Newsflash: What are the chances that is going to end anytime soon? Are we going to live in the dark and freeze in the wintertime? Final Answer: No.

I strongly believe in POM. They are a great company and the dividend is 100 % safe. POM has not missed a dividend payment since November 1987. Back when the Beastie Boys were performing on the infamous Joan Rivers show (see video clip below). RIP MCA!!

Okay back to POM. Although their earnings are always under pressure they recover very nicely each quarter. POM is THEE regulated utility and is already applying for a rate increases, which will line their pockets, as well as their shareholders. Pepco is a great buying opportunity at $18-$19, for it could hit in the high $20's within 6 months.

Pepco has a nice Q1 2012, see below for complete details:

Pepco Holdings Reports First-Quarter 2012 Financial Results; Reaffirms Full-Year 2012 Earnings Guidance
I must recommend listening to POM's Q1 2012 Earnings Conference Call by clicking on this link. 

Feel free to visit Pepco's home page, here, as well as their Investor Relations website, here. "Fight for your right" to a secure retirement with POM!

Until next time friends, continue to invest as much as you possibly can into your Roth IRA rather than impulse buying at your local mall. Cut up your credit cards and pay cash for every last thing you need. Take care now.