Company Description
Equitable Resources is an integrated energy company with emphasis
on Appalachian area natural gas supply, natural gas transmission
and distribution, and leading-edge energy management services for
customers throughout the United States.
[Source: Company Press Release]
Reasons to Invest:
Looking for a Drip with solid quarterly performance? Then I
believe that I have the DRIP for you. Equitable Resources Inc
(NYSE:EQT) cashed in the first quarter of 04 with revenues up 17
percent to $400.4 million. Their net income (before an accounting
change grew by 9% to $70.1 million. Did I mention their stock
just blew the top off of its proverbial glass ceiling (July 02
regression channel), and set a new all time high in today's trading
session?
EQT is forecasting an earnings per share (EPS) growth rate of
16.41 percent over the next year, 19.06 percent over the next
three years, and 28.42 percent over the next five years. This is
one of the highest EPS increases I have ever seen forecasted for
any of the DRIP's that I have recommended over the past year.
Think about it, if the company feels that their EPS is going to
increase by this much in the coming years, they are obviously
expecting good things to come in their near future, which means
more profitability for them and more capital for us.
Their annual dividend is $1.52 per share owned, which tabulates
out to a 2.98 percent dividend yield. This means that we are
guaranteed approximately three percent of our investment year
over year. Over the next 12 months the company expects a
dividend growth rate of 44.78 percent (BIG GRIN). Over the next
three years they expect a growth rate of 18.03 percent, and 10.46
percent over the next five years.
Just a few weeks ago (June 16th) Banc of America Sec initiated
their coverage of EQT with a Buy rating. As of right now three
brokers are covering this stock with a Strong Buy rating, while
three other brokers are recommending a Buy rating, and four
others are suggesting that traders hold the stock. The important
thing to note is that no one is recommending a Sell or Strong
Sell rating on Equitable Resources.
From a technical standpoint EQT is fundamentally solid. As
mentioned before the stock has been surfing through a July 2002
regression channel with ease. In fact the past 12 out of 14
sessions have closed in positive territory, setting higher highs
along the way.
As is, the chart looks extremely overextended and profit taking
should occur over the next few weeks. Keeping this in mind, you
might want to wait until short-term traders seek their profits,
which will dip the stocks price down, providing a better entry
point for you. I would like to see a pull back into the channel
around $48.50. Should this occur, this would mean that the
simple 10-DMA would have to be broken, and as is the stock has
used this level as support for higher highs (daily chart - short
term trend).
The weekly chart on EQT looks phenomenal, as the MACD indicator
has been on a bullish rampage since April of 04. The Stochastics
indicator has been consolidating for the past few months, yet it
remains in overbought territory. While the Stochastics indicator
has been in overbought territory it is to be expected since the
stock has been outperforming 13 out of the past 15 weeks.
Another good sign is the fact that the 10-DMA has rested over the
20-DMA since October of last year.
The monthly chart looks the same as the weekly chart. The MACD
is showing strong bullishness, while the stochastics indicator
looks close to a bearish crossover - yet has been consolidating
for quite some time now in overbought territory. The 10-DMA is
well above the 20-DMA, and is showing signs of increasing this
gap, which means there is an even better chance for profitability
on this dividend investment.
The point and figure revised bullish price objective of 51.00 has
been met, however, I believe that we could see this price
objective being revised again, as the chart pattern notes the
stock on a ascending triple top breakout.
Before I cut out, I would like to leave you with one final
thought... Trading is a lot like a sprained ankle... GRIN. You
never know how many muscles have to work in conjunction with one
another in order to take one measly step until you twist, sprain,
or even break your ankle. Moreover, you don't really care what
muscles make up your foot, until your hobbling down a few flights
of stairs with ace bandages trailing closely behind, and every
step you take has you grinding your teeth even harder than the
step before. You see there are hundreds of muscles that make up
your foot alone (Don't quote me on that), just like there can be
hundreds of indicators that make or break a stock trend. Some
traders don't really care what those indicators are, and some
just don't have the time to do the research in their recreational
time, but I assure you if the trade goes bad, they are quick to
do the research to find out why. I'll be the first to admit that
I tend to treat trading like my portfolio is already
sprained/broken. I like to do the analysis, I like to do the
research, shoot - sometimes I like to take a stab in the dark,
even when the fundamentals aren't all in positive territory. The
fact remains the same, if you don't know what the indicators are
saying your going to be hobbling around quite a few more red
trades than green trades until eventually your crutches and risk
capital have dwindled down to square one. All I am saying is
that it is just as important to invest your time into your
research of any given stock, as it is to invest your money in
them.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Until Next Week,
Nich Sheldon
Editor
www.dripadvisor.com
Broker Recommendations
Strong Buy 3
Buy 3
Hold 4
Sell 0
Strong Sell 0
Brokers Covering 10
DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $25-$5,000/month
Reinvestment Fees -
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A
Transfer Agent:
ChaseMellon
800-589-9026
Corporate Headquarters:
Equitable Resources Inc
One Oxford Centre, Suite 3300
Pittsburgh, PA 15219
Phone: (412) 553-5700
Fax: (412) 553-5757
