Thursday, December 27, 2012

The Two Top Utility Stocks by Analyst Ratings

Some income investors chase yield; some income investors chase yield increasers; and some chase earnings increasers. Many investors look for some combination of these features or they have their own set of criteria. One other way is to see if there is a consensus among the analysts.

I checked the list of electric utilities against what the research analysts think about them. I looked at the S&P Capital IQ STARS with four or five stars, TheStreet Buy recommendations, the Buy recommendations of First Call Consensus, the Jaywalk Consensus of either Strong Buy, Buy, or Hold, the Market Edge Longs, Ford Buy or Holds, the ResearchTeam™ Current Rating of Buy or Hold, and Credit Suisse Outperform or Neutral. After running all stocks through my screen, I only came up with two electric utility stocks that met all that criteria.

NextEra Energy, Inc. (NEE) is one of those two utilities. The company generates and markets electric energy in the United States and Canada, with about 4.6 million customers in Florida. The electrical generation comes from wind, solar, natural gas, nuclear, oil, coal, and hydro power plants. The stock trades at 14 times forward earnings and provides investors with a decent yield 3.4%. The company has increased dividends every year since 1994. Earnings for the latest quarter were up 2.0% on a 12.3% drop in revenues.

The other electric utility that came out of the filter is ITC Holdings Corp. (ITC), a Novi, Michigan utility involved in the transmission of electricity. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers, and alternative energy suppliers. The stock trades at 15.5 times forward earnings and yields 1.9%. The company, which has increased dividends every year since 2005, raised the dividend earlier this year by 7%. Earnings for the latest quarter were up 16.5% on a 12.5% boost in revenues.

To access a free list of high yielding electric utilities, which can be downloaded, sorted, and updated, go to


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