Seven Utilities Stocks Worth a Look Now
Looking for a little juice for the portfolio or dividends as a hedge against inflation? Then you might want to consider these seven dividend-paying utilities stocks that are up more than 15% year to date and trading near 52-week highs.
CenterPoint Energy (NYSE: CNP): Based in Houston and sporting a market cap of $8.6 billion, this diversified utility saw net cash flow from operations jump more than 30% in the most recent reporting period. The company has a 3.9% dividend yield and a long-term EPS growth forecast of 5.7%. The share price is up more than 28% year to date. The stock has outperformed competitor Xcel Energy (NYSE: XEL), as well as the industry average, in that time.
Constellation Energy (NYSE: CEG): The company has announced an agreement to provide electricity to U.S. Postal Service locations in New York and the northeast. It also recently announced acquisitions of Houston-based StarTex Power and Connecticut-based MXenergy Holdings. Its dividend yield is 2.5% and the market cap is $7.8 billion. Shares are more than 27% higher year to date. The stock has outperformed the electric utilities industry average, as well as competitor Duke Energy (NYSE: DUK), during that time.
El Paso Electric (NYSE: EE): Goldman Sachs recently reiterated its Buy rating and price target due to the Texas-based company's dividend and share buybacks. The utility is expected to post year-over-year EPS growth of 19.7% on August 3. The market cap is $1.4 billion and the long-term EPS growth forecast is 6.0%. The share price is up about 20% since the beginning of the year. The stock has outperformed American Electric Power (NYSE: AEP) and the industry average during that time.
NiSource (NYSE: NI): The Indiana-based utility is scheduled to post second-quarter results August 2; analysts expect to see revenues up 8.0% year over year. The dividend yield is 4.4%. The P/E ratio is 17.4 and the long-term EPS growth forecast is 7.6%. The share price has grown nearly 20% since the beginning of the year. In that time, the stock has outperformed competitors Dominion Resources (NYSE: D) and Duke Energy (NYSE: DUK), as well as the industry average.
ONEOK (NYSE: OKE): The Tulsa, Oklahoma-based natural gas provider just boosted its quarterly dividend by about 8%; it has raised its dividend 12 times since January 2006. ONEOK also recently completed a two-for-one stock split. Its market cap is $8.1 billion, the dividend yield is 2.6% and the long-term EPS growth forecast is 7.9%. The share price is up more than 36% year to date; the stock has outperformed its industry average and competitors such as OGE Energy (NYSE: OGE) in that time.
Portland General Electric (NYSE: POR): The Oregon utility raised the quarterly dividend 2% in May following better-than-expected first-quarter results and an increase in full-year guidance. The $1.9 billion market cap company has a dividend yield of about 4%. The P/E ratio of 11.5 is less than the industry average. The share price is more than 18% higher than at the beginning of the year. In that time, the stock has outperformed its industry average and the broader markets.
Southern Union (NYSE: SUG): This Houston-based natural gas provider has been the subject of a bidding war over the past few weeks but will be acquired by Energy Transfer Equity (NYSE: ETE). The merger is expected to be completed in 2012. Southern Union has a dividend yield of 1.4%. The share price is about 84% higher year to date, most of that growth coming after takeover talks began. The stock was outperforming its industry average even before that takeover bump.
Bullish: Traders interested in utilities exchange traded funds might want to consider the following trades:
- PowerShares Dynamic Utilities Portfolio (NYSE: PUI): up more than 16% in the past year
- Rydex S&P Equal Weight Utilities ETF (NYSE: RYU): up nearly 17% in the past year
- First Trust Utilities AlphaDEX Fund (NYSE: FXU): up more than 18% in the past year
- iShares Dow Jones U.S. Utilities Sector Index Fund (NYSE: IDU): up nearly 13% in the past year
Bearish: Traders looking for contrarian options may want to consider these alternate positions:
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