Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, El Paso Corp. is worth a review.

El Paso Corp. (NYSE: EP) operates the largest natural gas transportation system in the United States, with a host of attractive, lateral business lines including natural gas production, gas storage, power generation, and trading.

El Paso is in a sweet spot, of sorts, concerning energy. Record-high oil prices -- plus the unknown regarding how high the price of oil will rise ($150?, $175?, $200?) -- means that a good number of businesses and residences will convert to natural gas, where possible, which, of course, benefits transmitters and producers of natural gas. The U.S has experienced two other periods with mass defections from oil to natural gas, during the two previous oil shocks, in 1973-74 and 1979-80.

In general, analysts expect 7-10% 2008 production growth, on acquisitions, recovery of shut-in programs, and drilling operations.

Analysts also like El Paso's 2.9 trillion cubic feet of proved natural gas equivalent reserves in Brazil, Egypt, and the U.S.

Analysts also believe EP's premier gas pipeline franchise boasts strong organic growth potential, and its a primary driver of earnings growth. The Reuters F2008/F2009 EPS consensus estimates for EP are $1.24/$1.41.

The risks? A substantial, sustained decline in natural gas prices would (obviously) hurt EP's results. Analysts are also keeping an eye on El Paso's skilled labor costs.

The First Call mean rating for EP is: Buy (12 firms) and the mean 2008 target is $23 (high: $25, low: $21).

Stock Analysis: El Paso Corp. is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from EP's shares. Note: More-cautious investors may with to wait until EP pulls back to $18.50, but keep in mind EP may not retreat to that level. If you were to purchase shares in this company, consider a stop loss of $13.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.