Portfolio of Electric Utilities Stocks
Well-managed electric utilities are excellent candidates for a dividend
reinvestment portfolio. Typically, electric utilities generate lots of
excess cash and pay it out as dividends to shareholders.
Look for a company that has consistent earnings growth, a long history of rising dividends and a reasonable payout ratio, which is the ratio of dividends to earnings. A low payout ratio (less than 70 percent) indicates the possibility of future dividend increases. A very high payout ratio (greater than 90 percent) may not be sustainable and may signal a dividend cut in the future.
If the dividend yield (annual dividend divided by stock price) is very high (greater than six or seven percent) the company may have problems - the high yield may be due to a low stock price. Be very wary of stocks with high dividend yields and high payout ratios.
The following table includes 9 electric utilities that have multiyear histories of increasing their dividends. These stocks are worth considering for a dividend reinvestment portfolio.
Electric Utilities Stocks
Annual Dividend & Yield
1-Yr Price Chart
|American Electric Power||
|Hawaiian Electric Industries||
|Dividend yield data from Yahoo! Finance as of Aug-12-2017. Price and dividend data from Quandl.|
To inspect the performance of the Electric Utilities Stocks portfolio, see the returns table and chart below. Portfolio values are computed using quarterly closes from Quandl. All 9 stocks are included in the portfolio computations. The current value of the portfolio assumes that $1,111.11 was invested (total of $10,000) in each at its closing quarterly price for the current date in 2007.
Electric Utilities Stocks - Return Results
Electric Utilities Stocks
|Minimum value occurred on Mar-31-2009|
|Maximum value occurred on Sep-30-2017|
|Total gain or loss (Start date to End date)|
|Annualized gain or loss (Start date to End date)|
|Total dollar value on End date of a $10,000 purchase made on Start date|
|Average percent return for all possible buy/sell combinations|
|Number profitable returns (Winners)|
|Percent profitable returns|
|Number unprofitable returns (Losers)|
|Percent unprofitable returns|
|Winners to losers ratio|
|See Multiyear Chart of Monthly Portfolio Values|
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Utilities Exchange-Traded Funds (ETFs)