5 Electric Utilities Paying Substantial Dividends
http://seekingalpha.com/article/266282-5-electric-utilities-paying-substantial-dividends?source=email_investing_income
Electric utility companies are among the safest investments in stock markets, offering regular dividends. The thought of replacing high-priced gas with electrical power is gaining more popularity. If the consumer’s demand for electric vehicles gains momentum, the demand for electricity will also explode, turning these companies into profit machines. Here is a list of five large-cap electricity stocks offering excellent dividends and a maximum P/E ratio of 20. All of the large-cap companies that follow offered a minimum 5% dividend yield and have a minimum market capital of $12 billion.
American Electric Power Co., Inc. (AEP): The Ohio-based AEP is in the business of generation, transmission and distribution of electric power. Credit Suisse suggested an outperform rating for AEP, while Deutsche Bank, Hilliard Lyons, Sun Trust and KeyBanc recommend buying. AEP owns a market capital of $17.43 billion, and a trailing ratio of 13.9, while forward P/E is 11.18. Analysts expect the company to have a 3.51% growth next year. American Electric had a net profit margin of 8.56% in 2010, which paid a 5.08% dividend. Recent dividend history is as follows:
Feb 8, 2011
$0.46
Nov 8, 2010
$0.46
Aug 6, 2010
$0.42
May 6, 2010
$0.42
Duke Energy Corp. (DUK): Founded in 1916, Duke Energy operates through three segments: U.S. Franchised Electric and Gas, International Energy and Commercial Power. The company also owns, develops and operates a fiber optic communications network. Duke’s market capital is $24.68 billion, and P/E ratio is 18.5, while forward P/E is 13.34. The company had a 21.55% EPS growth this year. Having a 9.25% profit margin, DUK paid a 5.29% dividend last year. Duke’s insider transaction has grown up 25.05% for the last six months. Duke just announced a merger with its competitor, Progress Energy (PGN). The synergy between these two NC-based energy titans could prove to be very profitable in long-term. Its recent dividend history is as follows:
Feb 9, 2011
$0.245
Nov 9, 2010
$0.245
Aug 11, 2010
$0.245
May 19, 2010
$0.24
FirstEnergy Corp. (FE), founded in 1996 and based in Ohio, is a diversified energy company, providing service to about 4.5 million customers. Argus recommends buying FE shares. With a market capital of $12.07 billion, FirstEnergy has a P/E ratio of 15.41, and a forward P/E ratio of 13.38. Although the company experienced a negative EPS growth in the last five years, analysts expect the company to have a 4% EPS growth in the next five years. FE’s insider transaction had a rapid growth, up by 25.05% over the last six months. The company paid a 5.55% dividend last year, and its profit margin was 5.71%. Recent dividend history of FirstEnergy is:
Feb 3, 2011
$0.55
Nov 3, 2010
$0.55
Aug 4, 2010
$0.55
May 5, 2010
$0.55
Progress Energy, Inc. is in the business of the generation, transmission, sale and distribution of electricity in Florida, North Carolina and South Carolina. PGN has more than 22,000 megawatts of regulated electric generation capacity. The company has a market capital of $13.8 billion and a trailing ratio of 15.8, while its forward P/E ratio is 14.5. The company had an annualized EPS growth of 6.91% during the last five years. With a profit margin of 8.51%, PGN had a dividend yield of 5.28% in 2010. Once the final price of the merger with Duke Energy is determined, there might be arbitrage opportunities. Recent dividend payments of Progress Energy per share are as follows:
Apr 7, 2011
$0.62
Jan 6, 2011
$0.62
Oct 6, 2010
$0.62
Jul 8, 2010
$0.62
PPL Corp. (PPL) provides electricity service to about 4 million customers in the western and northeastern U.S. as well as in the U.K. FBR Capital suggested an outperform rating for PPL, while Argus and Davenport recommend buying. PPL owns a market capital of $13.23 billion. Its P/E ratio is 12.1, while its forward P/E ratio is 11.08. PPL’s earnings are expected to increase by 8% in the next five years. With a dividend yield of 5.12%, and a profit margin of 11.45%, PPL Corp. is more profitable than PGN. The recent dividend history of PPL is:
Mar 8, 2011
$0.35
Dec 8, 2010
$0.35
Sep 8, 2010
$0.35
Jun 8, 2010
$0.35
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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