The Dow Jones Utility Average is a Conservative Play for Income and Growth

If you are looking for a safe way to capture modest dividend income or reinvest dividends for long-term growth, the The Dow Jones Utilities Average (^DJU) may be for you.

The Dow Jones Utilities Average includes fifteen of the largest electric and natural gas utilities in the United States. The top five holdings in the index are (as of March 4, 2005) Excelon (EXC), Duke Energy (DUK), Southern Co. (SO), Dominion Resources (D), TXU Corp. (TXU). To see all fifteen stocks in the average click here.

You can own the utilities average through the iShares Dow Jones US Utilities (IDU), a very low-cost exchange traded fund (ETF) that tracks the average. You buy IDU from your broker and you may reinvest the dividends.

In 2004 IDU paid quarterly dividends that totaled $1.93 for a 2.7% yield.