Friday, October 11, 2013

3 Top Yielding Electric Utility Stocks

Investors looking for income and capital appreciation potential for the long term may want to consider electric utility stocks. If you look at the Dow Jones Utility Average over the last twelve months, you would see that utility stocks have dropped by 1.28%, partially due to fears of rising interest rates, partially due to the concern about competition from solar roof panels, and partially due to the fears about the reduction in electrical usage from fluorescent and LED light bulbs.

This may be a buying opportunity for contrarian income investors looking to get into  utilities. There are dozens of electric utilities to choose from with over 20 providing yields of 4% or more, according to

For example, TECO Energy, Inc. (TE) sports a yield of 5.3%. This electric and gas utility holding company provides electricity to West Central Florida. The stock trades at 20 times trailing earnings and 15.4 times forward earnings.The company has raised its dividend every year since 2006.

Integrys Energy Group, Inc. (TEG) serves the Wisconsin, Michigan, and Chicago areas. It has a P/E ratio of 14.3, a forward P/E ratio of 15.7, and offers a generous yield of 4.9%.

Black Hills Corporation (BKH) provides electricity to customers in South Dakota, Wyoming, Colorado, and Montana. It trades at 15.5 times earnings with a forward P/E of  19.7. The stock pays a yield of 3.1.

To see a list of dozens of high yield electric utilities, go to  The list has the PE. the forward PE, the PEG, and the yield for these stocks.

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


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