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Portfolio of Dividend-Paying 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.

Dividend-Paying Electric Utilities Stocks
Stock
Quote
Annual Dividend & Yield
Annual Dividend 100 Shares
Customize
Price to Annual Dividend Ratio
1-Yr Price Chart
American Electric Power
2.48 (3.54%)
$248.00
28.22
Consolidated Edison
2.86 (3.57%)
$286.00
28.02
Dominion Resources
3.34 (5.02%)
$334.00
19.93
Duke Energy
3.56 (4.44%)
$356.00
22.52
Entergy
3.56 (4.36%)
$356.00
22.92
Hawaiian Electric Industries
1.24 (3.57%)
$124.00
27.98
PPL Corporation
1.64 (5.64%)
$164.00
17.74
Southern Energy
2.32 (5.03%)
$232.00
19.88
Wisconsin Energy
2.21 (3.44%)
$221.00
29.09
Sum Dividends
$2,321.00
Price and dividend data from Quandl. Dividend, yield and price to dividend ratio as of May-01-2018.


To inspect the performance of the Dividend-Paying Electric Utilities Stocks portfolio, see the returns table and chart below. Portfolio values are computed using monthly closes for from Quandl.

All 9 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 weekly price for the current date in 2008.


Dividend-Paying Electric Utilities Stocks - Return Results
Portfolio:
Dividend-Paying Electric Utilities Stocks
Start date:
May-24-2008
Start value:
$10,000
End date:
May-24-2018
End value:
$22,273
Number prices
121
Minimum value occurred on Feb-28-2009
$7,174
Maximum value occurred on Nov-30-2017
$25,611
Total gain or loss (Start date to End date)
122.73%
Annualized gain or loss (Start date to End date)
8.34%
Total dollar value on End date of a $10,000 purchase made on Start date
$22,273
Average percent return for all possible buy/sell combinations
54.58%
Number returns
7,260
Number profitable returns (Winners)
6,782
Percent profitable returns
93.42%
Number unprofitable returns (Losers)
478
Percent unprofitable returns
6.58%
Winners to losers ratio
14.19
Stock Return Calculator





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