Electric Utilities Offer Above Average Yield Growth Potential

A portion of our portfolios should be in selections made with income as the primary objective. A good rule of thumb is that a minimum of 15% of portfolio value should be categorized as income oriented opportunities, based on the investor’s age and objectives. Many younger investors are so focused on capital gains potential that they bypass the importance of the more conservative nature of income selections. One approach to income investing is to find dividend paying stocks that offer both higher yield and growth potential. A good benchmark for comparison of income opportunities is the current long Treasury yield, with a minimum of 4.4% overall yield goal. Unlike Treasuries, with their fixed rate coupon rate until maturity (except TIPS), many dividend paying companies raise their payouts, thereby increasing the yield on invested capital and offering the potential for capital appreciation.... Read more