An Original strategy

Origin supplies natural gas, LPG and electricity to more than 1.2 million customers in all Australian states and throughout New Zealand. Its operations are divided into four segments: exploration and production; generation; retail and trading; and networks maintenance. As Boral Energy, it reported a 21% increase in operating profit for the half year ending December 1999 to $43.3m, with an unfranked six-cent dividend expected in June.

Weather set fair

While these businesses always have a lot of ifs and buts attached to profit forecasts, the healthy state of the oil price and an expected chilly Victorian winter (last year's warm winter ate into earnings by $12m) should make for good trading conditions. Lower LPG costs should bolster margins and capital expenditure should fall too. Last year, restructuring and redundancy costs of the reshuffle at Boral didn't help the bottom line. So, all things considered, the year's result should be well within the $85m to $100m range forecast.

Looking ahead things look rather promising for Origin, but there's more to it than that. The company has great growth prospects in all its traditional businesses. While the Origins of this world will often trade at a discount to the market average, even after the recent spike in its share price, thanks to takeover rumours, the stock is reasonably priced. There will always be other stocks throwing more becoming glances, but if you're after a stayer with plenty of energy, Origin deserves a look. ACCUMULATE.