PCG stock near 3-year low
There was a bloodbath in California utilities stocks on December 21, 2017. The fires in the state continued to hurt utilities as well as investors. PG&E (PCG) stock fell a huge 13% on December 21. The utility suspended its 4Q17 dividend amid mounting uncertainties related to its liabilities linked to the fires in the state.
PG&E stock has been trading weakly after it was speculated that it was one of the causes of the California wildfires. On December 20, 2017, a PG&E filing said that, according to state law, even if the utility has followed established inspection and safety rules, it could still be liable for property damages and attorneys’ fees related to the fires.
PG&E calls it a prudent move
PG&E was going to pay a quarterly dividend of $0.53 per share for 4Q17. Suspending these dividends could save billions of dollars in cash for PG&E, which seems to be necessary at the moment. However, it could be very painful for investors.
Rating agency Moody’s placed PG&E on a downgrade review on December 22, 2017.
PG&E shares have witnessed a massive change in volume recently. On December 21, 2017, nearly 52.4 million shares exchanged hands against its three-month average volume near 7 million.
The wildfires have not just burned PG&E. Its peer Edison International (EIX) also trended downward when the fires reached the southern part of the state. Edison stated that according to the investigation, its facilities could also be a possible cause of the fires.
Sempra Energy (SRE) stock closed 4.5% lower on December 21, 2017.
PG&E stock has fallen nearly 40% since the fires began in October 2017. The broader utilities (XLU) fell nearly 2% in that period.