Defensive Ideas: 9 High Dividend Utilities With Conservative Accounting Risk

When considering whether a company’s dividend is reliable, one area to look is the company’s accounting risk. A company’s accounting decisions can cause reported performance to significantly deviate from economic reality, which can mask problems that would otherwise signal a dividend in trouble. With this in mind, we wanted to find a list of utility stocks with high dividend yields (between 4-7%) and conservative accounting risk. To measure accounting risk, we used the forensic accounting firm Audit Integrity’s Accounting and Governance Risk (AGR) score. Scores closer to 100 indicate conservative accounting risk. After we screened utility stocks for high yields and high AGR scores, a final list of 9 emerged. Do you think these dividends are sustainable? Use this list as a starting-off point for your own analysis into reliable income investments. List sorted by AGR score. 1. Portland General Electric Company (POR): Electric Utilities Industry. Market cap of $1.80B. Dividend yield at 4.36%. According to Audit Integrity, the company has Conservative accounting practices, with an AGR score of 98. POR has a relatively low correlation to the market (beta = 0.69), which may be appealing to risk-averse investors. The stock has good liquidity to back up its dividend-- current ratio at 1.35 and quick ratio at 1.24. The stock has gained 28.57% over the last year.... Read more