Excelon (EXC): Powered by nuclear

"No US utility owns more of them than Exelon (NYSE: EXC), with 17 reactors," says Roger Conrad, who chose the stock as his latest "growth spotlight" in The Utility Forecaster.

"Some 80% of company earnings come from its unregulated generation fleet, 90% of which is nuclear. And it’s by far the best-positioned US utility to ramp up nuclear output.

"Existing brownfield sites are the only places to build the new reactors Washington wants. Exelon has also been masterful boosting efficiency, running its nukes at 92% of capacity or better for a decade.

"And it will increase their capacity 20%, or 1,300 to 1,500 megawatts, by 2017, by upgrading plant turbines.

"Exelon shares took a hit last year and now sell for barely half their July 2008 high. A 29 percent boost in first quarter earnings per share and affirmation of full year guidance laid recession questions to rest.

"The stock price and the company’s credit rating, however, have remained under pressure, due to a takeover bid for power producer NRG Energy. NRG management has gone to court to block the offer of 0.485 Exelon shares, though it’s hinted it would accept a higher number.

"The current deal has apparently won over a majority of NRG shareholders. The bottom line, however, is that Exelon will prosper as a nuclear power with or without NRG. And yielding over 4% and at barely 10 times projected 2010 profits, Exelon is a buy up to 60."

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