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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
Recent Price Chart
American Electric Power
2.68 (3.45%)
$268.00
29.01
Consolidated Edison
2.86 (3.56%)
$286.00
28.09
Dominion Resources
3.34 (4.48%)
$334.00
22.31
Duke Energy
3.71 (4.19%)
$371.00
23.86
Entergy
3.64 (4.18%)
$364.00
23.92
Hawaiian Electric Industries
1.24 (3.24%)
$124.00
30.90
PPL Corporation
1.64 (5.36%)
$164.00
18.65
Southern Energy
2.40 (5.07%)
$240.00
19.72
Wisconsin Energy
2.21 (3.05%)
$221.00
32.83
Sum Dividends
$2,372.00
Price and dividend data from Quandl. Dividend, yield and price to dividend ratio as of Dec-02-2018.


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 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 current date in 2008. All prices are adjusted for splits and dividends.


Dividend-Paying Electric Utilities Stocks - Return Results
Portfolio:
Dividend-Paying Electric Utilities Stocks
Start date:
Dec-15-2008
Start value:
$10,000
End date:
Dec-15-2018
End value:
$29,981
Number prices
121
Minimum value occurred on Feb-27-2009
$8,572
Maximum value occurred on Dec-14-2018
$29,981
Total gain or loss (Start date to End date)
199.81%
Annualized gain or loss (Start date to End date)
11.61%
Total dollar value on End date of a $10,000 purchase made on Start date
$29,981
Average percent return for all possible buy/sell combinations
54.14%
Number returns
7,260
Number profitable returns (Winners)
6,985
Percent profitable returns
96.21%
Number unprofitable returns (Losers)
275
Percent unprofitable returns
3.79%
Winners to losers ratio
25.40
Stock Return Calculator





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