AES Corp. (AES, Financial)(1.5% of net assets as of September 30, 2015) (AES – $9.79 – NYSE) is a global power company that owns assets in eighteen countries. The company operates over 36,000 megawatts (MW) of generating capacity and eight distribution networks, including larger utilities in the U.S. and Brazil. Since late 2011, AES has been undergoing a transformation to narrow the strategic focus, allocate capital efficiently, and improve existing operations. As a result, AES has sold approximately $3 billion in non core assets and repurchased stock and debt. In early 2013, the company formed six strategic business units, to include six focus regions: the U.S., Andes (Chile, Columbia, and Argentina), Brazil, MCAC (Mexico, Central America, and the Caribbean), EMEA (Europe, Middle East, and Africa) and Asia. Management remains committed to maximizing shareholder return through dividend growth, share buybacks, debt reductions, and investments in existing markets. The company offers a 3.8% current return on a $0.40 per share annual dividend, which management expects to grow 10% annually. With this focused approach to management, we regard AES as one of the better securities to allow the Fund to gain exposure to utility markets both inside and outside of the U.S.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Industrials Fund shareholder commentary for third quarter 2015.
