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

Electric Utilities Stocks
Stock
Quote
Annual Dividend & Yield
Recent Dividends
1-Yr Price Chart
American Electric Power
2.36 (3.33%)
Consolidated Edison
2.76 (3.31%)
Dominion Resources
3.02 (3.88%)
Duke Energy
3.56 (4.13%)
Entergy
3.48 (4.53%)
Hawaiian Electric Industries
1.24 (3.77%)
PPL Corporation
1.58 (4.09%)
Southern Energy
2.32 (4.75%)
Wisconsin Energy
2.08 (3.23%)
Dividend yield data from Yahoo! Finance as of Aug-12-2017. Price and dividend data from Quandl.


To inspect the performance of the Electric Utilities Stocks portfolio, see the returns table and chart below. Portfolio values are computed using quarterly closes 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 at its closing quarterly price for the current date in 2007.


Electric Utilities Stocks - Return Results
Portfolio:
Electric Utilities Stocks
Start date:
Aug-16-2007
Start value:
$10,000
End date:
Aug-16-2017
End value:
$25,152
Number prices
41
Minimum value occurred on Mar-31-2009
$7,819
Maximum value occurred on Sep-30-2017
$25,152
Total gain or loss (Start date to End date)
151.52%
Annualized gain or loss (Start date to End date)
9.42%
Total dollar value on End date of a $10,000 purchase made on Start date
$25,152
Average percent return for all possible buy/sell combinations
49.34%
Number returns
820
Number profitable returns (Winners)
724
Percent profitable returns
88.29%
Number unprofitable returns (Losers)
96
Percent unprofitable returns
11.71%
Winners to losers ratio
7.54
See Multiyear Chart of Monthly Portfolio Values


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