Hichens Harrison plc, Broker to Rurelec (AIM:RUR) issued a research note today outlining why the South American focused electricity provider appeared undervalued. Hitchens calculated that Rurelec looked attractive as the company had a replacement value of 177 pence per share, and an expected 2007 forward net asset value of 60 pence per share based on anticipated new capacity this year.
Hichens also reminded investors that Rurelec has an attractive dividend yield of 4.25%. Growth at Rurelec is being driven by strong economic growth in South America. The electricity provider is anticipated to grow capacity to 515 megawatts by year end, up from 444 megawatts in 2006.