Dean Witter upgrades Pacific Enterprises.Dean Witter Dean Witter may refer to:
Dean Witter Reynolds Dean Witter Reynolds was an American stock brokerage catering to the middle class. In 1997, it merged with the Morgan Stanley Group to form Morgan Stanley Dean Witter. The amalgamated firm is now known as Morgan Stanley. Inc. has upgraded its rating of downtown-based Pacific Enterprises Inc. from a hold to a buy to reflect a drop in the price of its shares. The New York-based investment firm cited eight reasons why the stock is a buy: * The stock has performed poorly, declining 12.5 percent since Jan. 1, while the typical gas distributor's stock has declined less than 5 percent. "We find the abysmally poor relative performance of the stock difficult to explain in view of continuing solid fundamentals," the report said. * The 50 to 60 basis yield premium target appears reachable. "We regard the 110 basis points yield premium at which Pacific Enterprises sells relative to the distribution group as inappropriate in view of the company's better than group average longer-term earnings and dividend growth prospects," the report said. Attainment of the 50 to 50 basis yield premium target would produce a high-$40s stock price and highteens total return for new investors holding the shares six months to 12 months, predicted Dean Witter Reynolds. * Significantly higher earnings are expected in 1991. "Our earnings a share estimate for 1991 is $3.30. This forecast assumes that SoCal Gas will be authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the currently allowed 13 percent return on equity and that the rate base expansion will approximate 7 percent." * Pacific Enterprises has not earned its $3.48 dividend from operations since 1987. Dean Witter does not expect Pacific will earn a dividend in either 1990 or 1991. But maintenance of the payment is expected, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de moderating capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. requirements and cash flow coverage of the distribution. * Significant balance sheet improvements were achieved in 1989, the debt-to-total capital ratio went from 55 percent in 1988 to 49 percent at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1989. * The report also cited modest financing requirements for 1990, an increase in oil and gas reserve levels and no negative impact from the Feb. 28 earthquake as favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. factors. |
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