Investing Beginner - Common Stock Prices

While prices are by no means excessive, they usually reflect the high esteem in which such shares are held by investors. Price fluctuations tend to be restricted because of the relative stability in earnings, particularly in comparison with industrial stocks, which mirror the impact of general business conditions because they are so dependent upon them for their success.

In addition to inquiring into the satisfactori-ness of the capital structure of the company, there are a few other matters deserving of serious consideration. Is the territory served stable and prosperous? Is there danger from competition with public power facilities?

Are rates satisfactory, and are the rate-making commissions reasonable in their attitude? Are operating costs well controlled? Is there adequate provision for depreciation and maintenance (about 15 per cent of gross sales) ? How large and how dependable are the hydroelectric facilities? Is there a majority of residential load? In making any comparisons, all these items deserve attention.

In conclusion, it may be said without serious challenge that the securities of many public utilities are usually of good quality and deserve consideration as investment media especially suitable for the investor of modest means. They represent, at least in most cases, good values and provide a relatively steady income with some possibilities of further growth.

Information concerning them is readily obtainable, and their annual reports are usually available for the asking. Appendix D suggests a number of likely candidates; the current price and dividends are tabulated; careful study of this table may bring its rewards.