I am thinking of buying (more) KPLC but I need others to check my basic calculations/reasons. Am I missing anything (positive & negative - and someone to burst my optimism)?

Price: 136/-
EPS (after pref shares div): 25/-
Div: 8/-
KenGen Bond: 12.5% (after Taxes) interest yield
Ceteris Paribus

8/136 = 5.88% less 5% (W/Tax) = 5.58% (div yield) is pretty good. If the price rises 7% annually then I 'match' the net return from KenGen.

136/25 = 5.44 (which is excellent/low)

Growth: Well,KPLC has to reduce operating costs (esp losses from vandalism) to increase PAT since top-line revenue growth will be stymied by:
- No more rate increases till 2011
- Lack of supply in the short-term (except thermal but that replaces lost hydro)
- The new customers are 'smaller' consumers. The best/biggest customers are all hooked up.

I see the largest PAT gains from the reduction in vandalism. If it can be contained.

KPLC has reduced its existing debt to relatively low levels. The new debt is being channeled into projects that will reduce costs e.g. new/efficient transformers.

KPLC has started laying fibre as well. This should allow them to be a carrier of carriers. Not their own ISP but allow ISPs to use their infrastructure. Maintenance costs of the fibre would be relatively low since it is hooked to KPLC's existing infrastructure.

The POTENTIAL is awesome over the long-term with new projects in the pipeline especially Geothermal. And hopefully hydro comes back on if it rains...

The low PE & decent dividend yield makes it a good buy... IMHO... What say you?

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB