Friday, December 07, 2012

Looking for 4% Yields on Your Money? How about Electric Utilities?

Income investors have very few choices in the extremely low interest rate environment. Money market funds pay virtually nothing, certificates of deposit pay less than one percent unless you want to tie up your money for many years.

There is one investment you can turn to, electric utility stocks. They provide income, They provide the potential of rising dividends, and they provide the potential of the growth or your capital investment. The yields on these utilities are as high as 7.0%, according to the updated free list of electric utility stocks at There are over 30 utilities with yields of 3% or more.

One example is Hawaiian Electric Industries (HE), which is one of the leading utilities involved in the use of renewable energy sources for the generation of electricity. The fuel sources include sugarcane waste, wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other biofuels. The stock trades at 15.4 times earnings and has a 4.9% yield.

Another high yield electric utility is Ameren Corporation (AEE), which serves customers in Missouri and Illinois. The stock trades at 35 times earnings and pays a nice yield of 5.3%. This St. Louis based company generates its electricity from coal, nuclear, gas, and hydroelectric sources.

Consolidated Edison (ED), which serves New York, New Jersey, and Pennsylvania, pays a 4.3% yield and trades at 14.8 times earnings. This New York based company serves 3.3 million customers in New York City and Westchester County.
For a free list of over thirty 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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