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


12 Dividend-Paying Electric Utilities Stocks

Stock Return & Price Chart

Symbol

Dividend (Yield) &
Chart

Recent Dividends &
Growth Rate

American Electric Power AEP$2.68 (2.93%)
Consolidated EdisonED$2.96 (3.30%)
Dominion ResourcesD$3.67 (4.67%)
Duke EnergyDUK$3.78 (4.03%)
EntergyETR$3.64 (3.21%)
Eversource EnergyES$2.14 (2.60%)
Hawaiian Electric IndustriesHE$1.28 (2.90%)
NextEra EnergyNEE$5.00 (2.29%)
PPL CorporationPPL$1.65 (5.34%)
Southern EnergySO$2.48 (4.12%)
Wisconsin EnergyWEC$2.36 (2.59%)
Xcel EnergyXEL$1.62 (2.59%)
Dividend data from Quandl as of Sep-14-2019.


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 12 stocks are included in the portfolio computations. The current value of the portfolio assumes that $833.33 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 $39,248. The percent return is 292.48%. The annualized return is 14.65%.




Return Summary for Dividend-Paying Electric Utilities Stocks
Start DateSep-30-2009
Start Investment$10,000.00
End DateSep-20-2019
Current Value of Investment$39,247.60
Total Return292.48%
Annualized Return14.65%
Min DateOct-30-2009
Min Price$9,736.45
Max DateSep-20-2019
Max Price$39,247.60
# Values121
Number Returns7,260
Number Profitable Returns7,051
Percent Profitable Returns97.12%
Number Unprofitable Returns209
Percent Unprofitable Returns2.88%
Profitable to Unprofitable Returns Ratio33.74



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


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