Wednesday, April 25, 2012

Top Yielding Electric Utilities

With the volatility of the stock market recently, many investors have decided to stick with the tried and true income generating investments called utilities. Investors like the steady income and relative stability of electric utility stocks, which pay quarterly dividends. Some income investors use a 'laddering' technique, whereby they purchase three utilities with dividend payout days in different months, in order to achieve income coming in every month of the year.

The yields on these stock range from 3.0% to above 7.0%, according to the free list of electric utility stocks at There are over 30 different utilities to choose from.

An interesting utility is Hawaiian Electric Industries Inc. (HE). This is one of the leading utilities involved in the utilization of renewable energy sources for the generation of electricity. The sources include wind, solar, photovoltaic, geothermal, wave, hydroelectric, sugarcane waste, municipal waste, and other biofuels. There must be something to this as the latest reported quarterly earnings ending December 31 were up over 38% on a 22% increase in revenues. With a 4.7% yield and trading at 17 times forward earnings, this stock might be worth a closer look. On May 8, the company reports earnings for the quarter ending March 31.

 Duke Energy (DUK) also pays 4.7%, as does Westar Energy (WR). They also both happen to have forward price to earnings ratios of 14.

Another high yield example is Ameren Corporation (AEE), which operates as a public utility holding company which serves customers in Missouri and Illinois. The stock trades at 17 times forward earnings and pays a nice yield of 5.0%. This St. Louis based company generates its electricity from coal, nuclear, gas, and hydroelectric sources. The company reports earnings on May 4.

For a list of over 30 high yield electric utility stocks, which can be downloaded, sorted, and updated, go to

Disclosure: Author did not own any of the above at the time the article was written.


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