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.


9 Dividend-Paying Electric Utilities Stocks

Stock Return & Price Chart

Symbol

Dividend (Yield) &
Chart

Recent Dividends &
Growth Rate

American Electric Power AEP$2.68 (3.20%)
Consolidated EdisonED$2.96 (3.53%)
Dominion ResourcesD$3.67 (4.97%)
Duke EnergyDUK$3.71 (4.22%)
EntergyETR$3.64 (3.86%)
Hawaiian Electric IndustriesHE$1.28 (3.09%)
PPL CorporationPPL$1.65 (5.43%)
Southern EnergySO$2.40 (4.60%)
Wisconsin EnergyWEC$2.36 (3.05%)
Dividend data from Quandl as of May-09-2019.



To inspect the performance of the Dividend-Paying Electric Utilities Stocks portfolio, see the chart below. Portfolio values are computed using monthly closes for stocks 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 stock at its closing monthly price for the first date shown on the portfolio value chart below. All prices are adjusted for splits and dividends.

The current value of a $10,000 investment is $36,098. The percent return is 260.98%. The annualized return is 13.70%.




Return Summary for Dividend-Paying Electric Utilities Stocks
Start DateMay-29-2009
Start Investment$10,000.00
End DateMay-24-2019
Current Value of Investment$36,097.86
Total Return260.98%
Annualized Return13.70%
Min DateMay-29-2009
Min Price$10,000.00
Max DateMay-24-2019
Max Price$36,097.86
# Values121
Number Returns7,260
Number Profitable Returns7,002
Percent Profitable Returns96.45%
Number Unprofitable Returns258
Percent Unprofitable Returns3.55%
Profitable to Unprofitable Returns Ratio27.14



NOTE: The stocks included in the tables and chart are representative of the industry. They are not recommendations.


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