Rational Speculation

Although I’m still waiting to open a new brokerage account, I just doubled my DRIP holdings of Pinnacle West Capital Corporation (PNW).

It’s not often that PNW drops below $40.00/share. Recent earnings haven’t lived up to analysts expectations, so there’s been some selling. However, this is only a short-term problem for PNW, and I’m a long-term investor in this company. I believe the selling presents a good buying opportunity, so I took advantage of it.

Pinnacle West has recently been approved for a rate increase which should improve it’s bottom line in the short-term. The company has also decided to expand it’s customer base by moving into the high growth area of western Arizona, and has also recently announced it’s expansion into solar-powered generation by building one of the largest solar-powered plants worldwide.

These ventures should provide continued long-term growth for Pinnacle West and assure their dominance in the State of Arizona, and further expansion into neighboring States.

Their 5.80% yearly dividend rate is looking good too. With all the recent Federal Reserve rate cuts, this dividend is much better (albeit riskier) than I would get if I left cash sitting in a money-market fund.