Monday, January 25, 2010

The Flight to Electric Utilities with Yields from 4% to 7%

The flight to safety, security, and income is on. Investors are now turning to electric utilities; after all, over the last three months, the Dow Jones Utility Index outperformed the S&P 500. has come up with a list of over 30 electric utility stocks that pay a dividend of 4% or more.

Utilities have historically been known as 'safer' stocks throughout history, meaning that they have been considered very conservative investments. Recently, that has shown to be not so true in recent history with respect to certain companies (e.g. General Public Utilities Three Mile Island), although overall, during long periods of time, utilities have paid favorable dividends with low volatility.

Here are some examples of utility stocks with decent CD beating yields.

Hawaiian Electric Industries, Inc. (HE) pays a yield of 5.9%, and has a forward PE of 13.8. The company is one of the leaders in renewable energy sources for electrical generation, such as wind, geothermal and hydroelectric power, sugarcane waste, and municipal waste. It distributes electricity throughout the islands of Oahu, Hawaii, Maui, Lanai, and Molokai

Consolidated Edison, Inc. (ED) has a yield of 5.4%, with a forward PE of 12.5. The company provides electricity, gas, and steam to customers in New York City and Westchester County.

American Electric Power Company, Inc. (AEP) yields 4.6% and has a forward PE of 11.6. AEP generates electricity from coal, lignite, natural gas, nuclear, and hydroelectric energy.

You can access a free downloadable Excel database of high yield electric utility stocks, which you can add to, change, and sort, at

Author does not own any of the above.


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