Investment thesis
PPL Corporation (PPL) is the 8th largest electric and/or gas utility in the U.S. It has raised the dividend for 16 consecutive years and has an A- credit rating from Standard & Poor's. PPL operates one of 8 electric distribution networks in the United Kingdom. In 2016, 62.87% of PPL's net income came from its British operation and 37.13% of net income came from its U.S. utilities. Thus, PPL adds some geographical diversification to the portfolio.
In 2015, the Pennsylvania electric generation operation was spun-off to PPL shareholders. This means the U.K. and Pennsylvania segments do not generate power--they only distribute it. PPL's Kentucky and Virginia operations involve the generation and distribution of electricity. Fuel sources for the Kentucky/Virginia power generation are 80.56% coal, 18.27% oil/gas and 1.17% hydro. Only 20.08% of PPL's 2016 net income came from the Kentucky/Virginia operations. One of the Kentucky utilities also distributes natural gas. So, PPL is mostly in the power (and gas) distribution business.
