Dominion Resources and Duke Energy to Open Near 52-Week Highs

While the Dow, Nasdaq and S&P 500 all fell more than 2% on Friday, utility companies Dominion Resources D and Duke Energy DUK reached new 52-week highs of $51.44 and $20.21 per share, respectively. Dominion Resources has paid a dividend every year since at least 1983. But the company felt the impact of both a hurricane and an earthquake recently. That could affect earnings, which are scheduled to be released October 24. The Richmond, Va.-based electric and natural gas utility serves customers in 14 states and also sells electricity wholesale. Founded in 1909, Dominion Resources now has a market cap of $29.2 billion. The price-to-earnings ratio and the PEG ratio are higher than the industry average, but so is the operating margin. The dividend yield is 3.9%. The CEO and CFO bought shares during the August sell-off. The share price is now almost 16% higher than six months ago. The stock has outperformed competitor American Electric Power AEP over that time. Duke Energy recently announced plans for its fifth wind farm in Texas. Duke also raised rates over the summer. The company is in the process of merging with Progress Energy PGN; shareholders of both companies signed off on the merger in August. Charlotte, N.C.-based Duke Energy owns, operates, and manages power generation facilities and sells and markets electric power and natural gas. Its market cap is $26.6 billion. It was founded in 1916. The P/E ratio is less than the industry average and the dividend yield is 5.0%. But none of the 20 analysts following the stock rate it a Buy. Duke Energy's share price has risen more than 16% since the beginning of the year, and almost 6% in the past month. Year to date, the stock has also outperformed American Electric Power but has underperformed competitor Constellation Energy CEG. Action Items: Bullish: Traders interested in utilities exchange traded funds might want to consider the following trades:

• Utilities Select Sector SPDR XLU: up more than 11% in the past year
• iShares Dow Jones US Utilities IDU: up almost 11% in the past year
• Rydex S&P Equal Weight Utilities RYU: up more than 9% in the past year

Bearish: Or traders looking for other top performing electric utilities might want to consider these alternative positions:

• FirstEnergy FE: up more than 26% year to date
• ITC Holdings ITC: up more than 27% year to date

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