Newspaper article The Topeka Capital-Journal

Westar Has Top Kansas Stock, Personal Finance Website Says

Newspaper article The Topeka Capital-Journal

Westar Has Top Kansas Stock, Personal Finance Website Says

Article excerpt

If you want a relatively high return and low volatility, you could do worse than to invest in Westar Energy, a personal finance website indicated in its ranking of the best-performing stocks from companies based in Kansas.

SmartAsset, which writes about personal finance topics, produced a list of the top stocks nationwide and in each state, based on return on investment and volatility. The analysis included some companies with at least $50 million in assets at the end of the first quarter this year, but not all. For example, Overland Park- based Sprint wasn't included because of incomplete data, according to SmartAsset.

A.J. Smith, managing editor for SmartAsset, said they compared how much higher the stock's return was than the three-month Treasury bill, which is as close to a risk-free investment as you can get, over five years. They then divided that by a measure of volatility. She cautioned, however, that the rankings aren't advice on stock picking, but a way to get people interested in learning about investing.

Based on that formula, Westar was the top ranked stock of a company based in Kansas, with an average annual return of 11.8 percent and a difference of 15.5 percent between its high and low points during that time. The average for all publicly traded companies it examined in Kansas was a 5.0 percent return and 42.5 percent volatility.

Bruce Burns, director of investor relations for Westar, said economic ups and downs don't impact regulated utilities as much as they do other businesses. Everyone needs electricity, though weather and customer growth do have an impact, he said.

"In extremely good times, we're going to be growing at about the same rate" as in leaner times, he said. "You're kind of that turtle in the race."

The biggest factor influencing a regulated utility's earnings is how much return on equity, or profit for shareholders, state agencies allow, Burns said. Large institutional investors, whose capital the company needs to invest in its infrastructure, look for a higher allowed return when deciding where to put their money, he said.

"When we establish rates and the return on equity is reduced, that's going to have an impact on earnings," he said.

The utility announced $64 million in earnings, or 47 cents per share, for the second quarter of 2015. That was up from $53 million, or 41 cents per share, in the second quarter of 2014. Earnings were down when comparing the first six months of 2015 with the same period last year, however, which Westar attributed to relatively mild weather and a $9 million refund of excess revenue it had collected for transmission expenses.

If you aren't concerned about volatility and just want the highest return, however, you might consider Seaboard, which is based in Shawnee Mission and had a 22. …

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