You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
As you stare at your computer screen, with the dryer humming and dinner cooking, consider the crucial role of electrical power. The planet's thirst for it appears unquenchable. In the U.S., demand for electricity is growing three times faster than power resources are being added.
Enter Itron, which makes high-tech smart meters, software and communications gear for measuring energy usage in real time. One analyst calls Itron, a member of the Kiplinger Green 25, the "Microsoft of metering."
You may have already seen Itron's products at work. If you've ever noticed a meter reader in your neighborhood wielding a handheld device, chances are the Liberty Lake, Wash., company made it. Itron, which sells to more than 3,000 utilities in the U.S. alone, owns 60% of the domestic market for meters and related devices.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
John Quealy, the analyst who likens Itron to Microsoft, says that because of increasing concerns about global warming, efforts toward capping emissions and the world's huge appetite for energy, the need for Itron's products is greater than ever. "You cannot fix what you cannot measure," says Quealy, who is with Canaccord Capital, an investment firm based in Vancouver, British Columbia. "New technology needs to supplant the electric power grid. That evolution starts with a smart 21st century electric meter."
Itron makes traditional and digital meters for electricity, water and gas. Its Automatic Meter Reading systems transmit data from meters to the utility supplying the service. Newer versions of the system allow utilities to charge customers based on actual usage rather than on estimated usage.
Itron's next-generation Advanced Metering Infrastructure (AMI) technology gives utilities remote access to meters, allowing providers to control usage during peak hours. The new system will also provide customers with more-detailed data on usage. "It will allow people to see real-time pricing in their bills, such as time of use, time of year, time of day," says Quealy. "It gives us control, so that we can make informed decisions to use power efficiently and effectively."
The prospects are bright for smart-metering systems. The Energy Policy Act of 2005 mandates that all electric utilities consider implementing advanced metering systems to increase efficiency. In December, Itron won a $480 million contract from Southern California Edison for new meters and related equipment. In the past two months, Itron inked at least another nine deals with companies in the U.S., Asia and Australia.
Expanding overseas is a key part of Itron's growth strategy. Last year, it purchased a rival, Actaris Metering Systems, of Luxembourg, for $1.6 billion. With the addition of Actaris, which does business in more than 30 countries, Itron now has a 17% share of the global electric metering business.
The acquisition boosted Itron's fourth-quarter results. Sales more than doubled, to $402 million, from the same period a year ago. Fourth quarter earnings, at 81 cents a share, were well ahead of analysts' average estimates of 73 cents a share.
The fine results came as a relief to Itron shareholders, who had seen the stock (symbol ITRI) tumble 21%, to $80, on November 2 after the company reported third-quarter numbers that failed to meet analysts' expectations.
The shares, which traded at $81 when we recommended them in 25 Ways to Invest in a Cleaner World, closed April 1 at $92.83. Selling at 28 times estimated 2008 earnings of $3.36 per share, the stock may seem pricey. But earnings are expected to rise 21% this year, and analysts see a 32% leap in 2009, to $4.42 a share.
If the company makes those numbers, today's price-earnings ratio is defensible. Adds analyst Quealy: "With utility companies' balance sheets robust and capital expenditure plans intact in this soft economy, you would expect a better than average P/E ratio, given the amount of business coming down the pipeline."
Itron could stumble if its pilot AMI projects run into technical problems or don't produce the benefits that utilities expect. Analyst Paul Coster of JP Morgan Chase has warned, moreover, that growth could slow if the commissions that oversee utility companies refuse to approve higher rates to cover the costs of the new metering systems.
But given the universal need for more-efficient energy usage, it's more than likely that Itron can measure up to expectations.
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
States With No-Fault Car Insurance Laws (and How No-Fault Car Insurance Works)A breakdown of the confusing rules around no-fault car insurance in every state where it exists.
-
Why Picking a Retirement Age Feels Impossible (and How to Finally Decide)Struggling with picking a date? Experts explain how to get out of your head and retire on your own terms.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
