If I told you there was an electric utility with a 4% yield and a plan to reduce its debt would you be interested? If you would then you'd be happy to note that there is such a stock, Westar Energy Inc. (symbol: wr). The company is a regulated electric utility in Kansas.

Westar Energy (I will refer to it by its symbol, WR) has a large debt load but a plan to reduce it drastically, it also has a nice dividend of 4% despite its low payout ratio of 35%. Once the debt is eliminated I suspect that this company will raise the dividend and start expanding. This stock combines the generous dividends and low P/E of a utility with the growth strategy of a large corporation.

The reason the stock is so low is because two former executives embezzled money from the company, but it wasn't enough to do any serious damage and charges were brought a while ago (click here for a link to the full story). Smart investors will look to the future and not the past, the price of this stock will not remain low for long I expect $32 by the end of 2006.


disclosure: the author owns stock in WR