Sunday, October 31, 2010

What Utility has Increased its Dividend Every Year Over 25 Years (Actually there are 3)

When a company increases its dividend every year for over a quarter of a century, it says a lot about the company's continued strength of earnings, and it also shows dedication to shareholders. There aren't many companies around that can claim that track record, maybe less than fifty. And of that group, only two and a half are utility stocks (I'll explain the half shortly).

One of these classic stocks is the ever popular Consolidated Edison Inc. (ED), a provider of electric, gas, and steam utility services in New York City and Westchester County. In terms of yield, it shows up about halfway down the list of electric utilties at, at 4.8%. The stock has a forward price to earnings ratio of 14.

The second utility to make this exclusive club is Integrys Energy Group, Inc. (TEG), an electric and gas utility that serves Chicago, Wisconsin, Michigan, and Minnesota. The stock has a yield that is a bit higher than Con Ed, paying out 5.1%. The company trades at 16 times forward earnings. Operating income of $1.12 billion provides excellent coverage for dividend payouts of $210 million.

Now to the reason I mentioned two and a half companies. The third company isn't technically a utility; it is considered an oil and gas company. It is the Salt Lake City, Utah based Questar Corporation (STR), a producer and explorer of oil and natural gas. But it also provides retail natural gas distribution services so it could be put in the natural gas utility category. The stock yields 3.3% and trades at 15 times forward earnings. Operating cash flow of $1.15 billion is far more than dividend payouts of $98 billion.

If you want to see a free list of all the top yielding electric and gas utility stocks, go to

Disclosure: Author didn't know any of the above at the time the article was written.


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