PPL Corp: A Utility for Challenging Times

Second, a recovery in electric power demand, and a resumption of household formation growth points to a considerably stronger earnings performance in 2010.

Finally, a $1.38 annual dividend, good for a 4.72% yield at the current roughly $30 stock price, will help you sleep well at night. The First Call FY2010/FY2011 EPS estimates for PPL are $3.31 to $3.22.

Technically, PPL Corp's stock has fallen below the key, 50-day moving average and psychological support at $30. If each continued, they would represent a concern, as the technical story would then be conflict with the fundamental story; however, the calculation here is that the stock price drop is temporary.

2010 Outlook: I view PPL Corp as a long-term play, but if investors are looking to sell PPL within the year, it's probably best to take your profits after it rises to $37-39, if it fails to clear $40.

Stock Analysis: I consider PPL Corp to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 50% position in PPL now; then buy another 25% in one month, if U.S. economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 75% of my PPL position before April 2010 and I'd put a sell/stop loss at: $17.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.