Portfolio of Electric Utility 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 be in trouble - 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 18 electric utilities that have multiyear histories of increasing their dividends. These stocks are worth considering for a dividend reinvestment portfolio.
Electric Utilities Stocks
Dividend & Dividend Yield
1-Year Price Chart
|American Electric Power||
|UniSource Energy Company||
|Dividend yield data from Yahoo! Finance as of Jul-19-2014. Click small charts (sparklines) to expand. * Uses 10 years or all years of prices, whichever is less.|
To follow the progress of the Electric Utilities Stocks portfolio, check out the returns table and chart below. Portfolio values are computed using weekly closes for stocks from Yahoo! Finance. All 18 stocks are included in the portfolio computations. The current value of the portfolio assumes that $555.56 was invested (total of $10,000) in each stock at its closing weekly price for the first week of January 2004.
Electric Utilities Stocks - Return Results
Electric Utilities Stocks
|Minimum value occurred on May-17-2004|
|Maximum value occurred on Jun-23-2014|
|Total gain or loss (Start date to End date)|
|Annualized gain or loss (Start date to End date)|
|Total dollar value on End date of a $10,000 purchase made on Start date|
|Average percent return for all possible buy/sell combinations|
|Number profitable returns (Winners)|
|Percent profitable returns|
|Number unprofitable returns (Losers)|
|Percent unprofitable returns|
|Winners to losers ratio|
Click chart to enlarge it.
Customize your own Portfolio of Electric Utilities Stocks using stocks from the above table. See returns for specified combinations of stocks for specified durations.
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