Robert W. Baird gave the Diversified Utilities industry some bad news as it announced a downgrade on one of its stocks.

Integrys Energy Group, Inc. (TEG) [Chart - News - Analysis] was downgraded from Outperform » Neutral on 10/12/2009---a negative sign for the stock that investors will have to endure. FYI, Robert W. Baird uses the following rating scale when analyzing stocks: Outperform, Neutral, Underperform.

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Integrys Energy Group, Inc. has an average analyst recommendation score of 2.2 and competes for investment dollars with Exelon Corp. (EXC) [Chart - News - Analysis] and Public Service Enterprise Group Inc. (PEG) [Chart - News - Analysis]---two other stocks in the Diversified Utilities industry that have average analyst recommendation scores of 2.2 and 2.2 respectively.

Analyst recommendations are averaged and scored using the following rating scale:

- 1.0 = Strong Buy

- 2.0 = Buy

- 3.0 = Hold

- 4.0 = Sell

- 5.0 = Strong Sell

Why are Upgrades and Initiations Good and Downgrades Bad?

One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.

Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.

Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.

What is a Stock Analyst?

Check out the Understanding Stock Analyst Research and Recommendations video and article for more info.

A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.

Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.

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Integrys Energy Group, Inc. (TEG), leads the utilities boasting a solid 8.02 dividend yield. The Company, through its subsidiaries, operates as a regulated electric and natural gas utility company in the United States and Canada.

NiSource, Inc (NI) is also high on the dividend yield list at 7.13, while Progress Energy, Inc (PGN) sits at 6.34. The company said last month that second-quarter GAAP earnings dropped to $174 million or $0.62 per share from $205 million or $0.78 per share in the previous year. The company's operating revenues for the quarter increased to $2.312 billion from $2.244 billion in the prior-year period.

Duke Energy Corp (DUK) is no slouch at 6.29. The company posted a decline in second-quarter profit that totaled $276 million or $0.21 per share, compared with $351 million or $0.28 per share in the year-earlier quarter, as the company continued to experience lower demand for power from industrial consumers amid the recession. Operating revenues for the quarter fell 9.9% to $2.91 billion from $3.23 billion in the prior-year quarter.

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