21 Utilities Yielding More Than 4.5%, Raising the Dividend

I received so much positive feedback on a recent look at obscure REITs that I decided to take a look at Utilities. Clearly investors are interested in finding alternatives to low-yielding fixed-income securities. While I continue to think that the best long-term answer is to invest in conservative and well-capitalized companies that can actually grow their dividends at a faster rate and are cheaper on a PE basis (and less leveraged financially), I understand why investors like REITs, MLPs and, as I address today, Utilities. Before I share my results of a screen I run, I want to remind readers that I shared my favorable view on the sector in March. Regulated Utilities have several risks, but they tend to be able to overcome them and ultimately pass their mistakes on to the users rather than investors. Maybe that's too harsh, but we are talking about monopolies. In my view, investors like REITs because they can grow their dividends faster typically than Utilities. These days, that's less certain. With that in mind, I ran a screen looking for attractive candidates in Utilities, but I decided to accept a lower yield than I did on the screen from this weekend with REITs. Generally, with low rates expected to persist for years, I expect Utility dividend yields to push all-time lows.... Read more