New Plan Gets Mixed Reviews From Shareholders, Analysts

News of a dividend cut and change in corporate philosophy sent many Washington Water Power Co. investors packing. The price of a share of common stock tumbled from $20.88 the day prior to the announcement to $16.08 in the weeks that followed. The stock closed Friday at $17.18.

Since WWP’s Aug. 17 announcement, Chairman Tom Matthews has met with analysts and local stockbrokers. This is how some have responded:

D.A. Davidson analyst James Bellessa Jr., neutral before and since the announcement, said he is telling clients who had held the stock for its yield to sell when the shares recover some of their strength.

Bellessa said the company’s new business plan has potential, but he added, “It’s hard to change your stripes.”

Pat West, a long-time follower of WWP at Smith Barney in Spokane, predicted shareholders will oversubscribe the proposed 20 million share “soft-landing” package, which will continue the current $1.24 per share dividend for three years but cap share price appreciation.

No other news, he noted, ever created an uproar among his clients like the WWP dividend cut.

Ken Roberts, owner of a private investment company in Spokane, has never been a holder of WWP stock. Although still cautious, he said he might suggest the shares to clients attuned to management’s aggressive, but risky, expansion plans.

Analyst Andrew Levi at Credit Suisse First Boston Inc. Thursday raised to “buy” from “hold” his assessment of the company.

Analyst Sam Brothwell at Merrill Lynch & Co., also Thursday, raised his rating to near-term “accumulate” from near-term “neutral.” He predicts the stock will reach $21 in 12 to 18 months.

Brothwell said the stock has been “excessively beaten up” since the company’s announcement.