8. Recommendation:
We would maintain a hold recommendation on FPL’s stock. The previous hold recommendation was based on the belief that FPL would keep its dividends at $2.48 per share or increase it slightly, and there little reason to believe that this will not be the case. Merrill Lynch’s own downgrade of FLP was based on the belief that FPL would keep its dividend at $2.48. FPL’s management has suggested that the dividend payout ratio is excessive given the conditions facing the industry, but has not indicated a bias toward cutting the dividend.