Potential for Dramatic Improvement at SSE

Scottish and Southern's primary growth engines should be renewable and transmission projects

Mark Barnett 8 September, 2011 | 2:57PM
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As one of the U.K.'s largest energy companies, Scottish & Southern (SSE) offers investors exposure to both the regulated and nonregulated elements of the energy value chain. With its commitment to a solid dividend and greater potential upside than a fully-regulated utility, Scottish & Southern is worth a closer look from income-oriented investors.

We are not especially fond of Scottish & Southern's current generation mix, though the company is exploring significant additional natural gas capacity and over the longer term potential nuclear development in the U.K. Adding nuclear generation would significantly improve its asset profile, and the growth of its wind portfolio would improve returns dramatically as well if power prices were to recover. These projects are still in the early stages of development, however, and may not materialise.

Morningstar equity analyst Mark Barnett's full research report on Scottish & Southern can be read here. Morningstar research is a feature of Premium.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
SSE PLC1,777.50 GBX0.94Rating

About Author

Mark Barnett  Mark Barnett is a stock analyst with Morningstar.

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