Picking the Best Electric Utility Dividends for the Next 5 Years

Utility stocks are known to be the dividend kings of the market. Among the utility companies, electric utility companies are among the safest investments, offering regular dividends. These companies are subject to regulations, yet most of them have almost monopoly power in their region. While their business looks pretty simple with limited growth potential, the recent merger between Duke (DUK) and Progress Energy (PGN) is a perfect example showing the dynamic complexity in the sector. A single company operates several power plants, providing electricity through a variety of distribution channels with differentiated prices to different types of customers. There are mainly two driving forces for increased profits. First, is the increased demand for energy. Next is the effective use of innovative cost control mechanisms. There is a possibility that if the consumer’s demand for electric vehicles gains momentum, the demand for electricity might also explode, boosting the profits. The question... Read more