Sample Portfolios: Electric Utility Stocks Pay Increasing Dividends

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 be in trouble - 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 electric utilities that have multiyear histories of increasing their dividends. These stocks are worth considering for a dividend reinvestment portfolio.

Electric Utilities Portfolios - Dividend Information
Company and Website (Dividend History)	Quote Symbol	Comments	Dividend Chart	Annual Dividend & Yield	Dividend Growth Rate
Entergy	ETR	ETR has been increasing its dividends since 2000.	Chart	$3.00 (3.70%)	Table
Exelon	EXC	EXC has raised its annual dividend every year since 2007.	Chart	$2.10 (4.70%)	Table
FPL Group	FPL	FPL has paid consectutive quarterly dividends since 1946. It raised its annual dividend every year since 1994. It is a Dividend Achiever.	Chart	$2.00 (4.20%)	Table
PPL Corporation	PPL	PPL has raised its annual dividend every year since 2000.	Chart	$1.40 (4.90%)	Table
Progress Energy	PGN	PGN has raised its annual dividend every year since 1988. It is a Dividend Achiever.	Chart	$2.48 (6.20%)	Table
Southern Company	SO	SO has raised its annual dividend every year since 2003.	Chart	$1.75 (5.20%)	Table
UniSource Energy Corporation	UNS	UNS has raised its annual dividend every year since 2001.	Chart	$1.56 (4.90%)	Table

NOTE: Dividend data used in charts and computations are from finance.yahoo.com as of Mar-20-10.

Price & Returns Information includes price charts and performance data.

Investor & Profile Information includes links to a company's investor relations page and profile.

All Dividend-Paying Portfolios includes links to each portfolio.

Great Dividend Stocks includes links to more dividend-paying stocks.

Diversified Utilities

Natural Gas Utilities

Water Utilities

To follow the day-to-day progress of the Electric Utilities portfolio, check out the chart below. It is updated each day, so the portfolio values are always current. The current value of the portfolio assumes that $1,428.57 was invested (total of $10,000) in each of the 7 stocks at its closing weekly price for the first week of January 2001.

Click chart to enlarge it.

See High-Yield Electric Utilities - Current Dividends and Dividend Yields for a list of electric utilities sorted by dividend yield.

Today's date: Mar-20-2010.