Jim Cramer is Wrong About Consolidated Edison!

Consolidated Edison (ED) owns and operates several competitive energy businesses. They provide electricity to approximately 3.2 million customers and gas service to approximately 1.1 million customers. They have spent more than 180 years serving the greater New York marketplace. ED's stock price has plummeted since December, falling from $51.21 to its current price of $41.28. During April 2, 2008's "lightning round", Jim Cramer of MSNBC's Mad Money was bullish on ED stating, "This is a travesty or mockery or a sham that this stock keeps going down. You're going to look back and say how did I get this stock this cheap?"

Kevin Burke is the President, CEO and Chairman of the Executive Board. He has held multiple positions within ConEdison since 1973. Jim Cramer likes him and has known him for a long time. He feels that he is a great CEO and business leader. The stock did uptick about 1.5% today, probably on Jim Cramer's Lightning Round comments.

I would have to disagree with Jim Cramer. If I were to have to label Mr. Burke, it would probably be a word like mediocre, or status quo. Based upon my own research, I see ED's EPS growth rate just above 1% and their equity and sales growth at a mere 5%. If you follow my rules, you know that I wouldn't put any money into a company with this low of growth rates.

I do believe that ED is a good company. It is well run and does its job effectively and efficiently. However my research tells me that the future value of the stock is significantly less than it is today. There is no way I can recommend ED as a "buy".

What Consolidated Edison does have going for it is a great dividend at 5.9%. If you are looking to put your money in a relatively stable, dividend paying utility for income purposes, then ED may be for you. It is a pretty good recession proof stock, just don't expect any growth out of it, I don't see it coming.

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