Sunday, September 30, 2012

The 123 Year Old Natural Gas Company that Pays a 3.9% Yield

There is a natural gas utility company that is the eighth oldest listed stock on the New York Stock Exchange, and celebrated its 120 year anniversary on December 7, 2009. In addition, it was one of the original stocks in the Dow Jones Industrial Average, back in 1896. How's that for a track record.

And the name of the stock is Laclede Group Inc. (LG), formerly known as Laclede Gas Company. This is a natural gas utility that yields 3.9%, trades at 15.9 times trailing earnings, and has a forward price to earnings ratio of 15.8. The company pays out $37.37 million in dividends, very well covered by the company's operating cash flow of $94 million. The company has increased its dividend every year since 2003. Net economic earnings for the latest quarter were $0.40 per share compared to $0.65 per share last year. Excluding prior year earnings of $0.27 per share from the propane sale, net economic earnings grew by 5% from the prior year.

Other natural gas and propane gas utilities with high yields are available. has turned up over 20 gas utilities with yields ranging from 2% to in excess of 10%, such as Nicor (GAS) yielding 4.5%, Spectra Energy (SE) yielding 3.8%, and Chesapeake Utilities (CPK) yielding 3.1%.

You might also consider investing in electric utilities, which also pay fairly high yields, many in excess of 5%.

To see a list of 20 gas utilities, you can get a free downloadable Excel database of natural gas and propane stocks at

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


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