20 High-Yield, Safe Utilities
Dividend Yield | Apr 07, 2013 04:15AM ET
Many people believe that utility stocks have a higher degree of safety because of the stability of the companies in the sector and their ongoing relationships with clients.
However, utilities also have two big burdens. They don’t grow quickly and if they grow they need greather amounts of money to keep the business growing. The second problem, that most utilities are very capital intensive, means they fulfill their capital needs with loans. That’s normally not a problem because a utility has stable cash flows and can get access to the capital market very easily.
Today I'm focusing on the safest dividend stocks from the utility sector. 123 equities are available within this sector. I screened all of them for companies that have a market capitalization over USD 10 billion and a beta ratio below one.
Below is a list of the 20 best yielding companies. Three of them are High-Yields and eight have a buy or better recommendation.
Exelon Corporation (EXC) has a market capitalization of $30.05 billion. The company employs 26,057 people, generates revenue of $23.489 billion and has a net income of $1.171 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.352 billion. The EBITDA margin is 18.53 percent (the operating margin is 10.52 percent and the net profit margin 4.99 percent).
Financial Analysis: The total debt represents 25.07 percent of the company’s assets and the total debt in relation to the equity amounts to 91.06 percent. Due to the financial situation, a return on equity of 6.48 percent was realized. Twelve trailing months earnings per share reached a value of $1.40. Last fiscal year, the company paid $2.10 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.03, the P/S ratio is 1.28 and the P/B ratio is finally 1.40. The dividend yield amounts to 5.98 percent and the beta ratio has a value of 0.53.
Get The News You Want
PPL Corporation (PPL) has a market capitalization of $18.32 billion. The company employs 17,729 people, generates revenue of $12.286 billion and has a net income of $1.537 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.368 billion. The EBITDA margin is 35.55 percent (the operating margin is 25.09 percent and the net profit margin 12.51 percent).
Financial Analysis: The total debt represents 46.13 percent of the company’s assets and the total debt in relation to the equity amounts to 192.06 percent. Due to the financial situation, a return on equity of 14.25 percent was realized. Twelve trailing months earnings per share reached a value of $2.61. Last fiscal year, the company paid $1.44 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.04, the P/S ratio is 1.49 and the P/B ratio is finally 1.75. The dividend yield amounts to 4.68 percent and the beta ratio has a value of 0.38.
Duke Energy (DUK) has a market capitalization of $50.77 billion. The company employs 27,885 people, generates revenue of $19.624 billion and has a net income of $1.746 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.399 billion. The EBITDA margin is 27.51 percent (the operating margin is 15.85 percent and the net profit margin 8.90 percent).
Financial Analysis: The total debt represents 35.59 percent of the company’s assets and the total debt in relation to the equity amounts to 99.16 percent. Due to the financial situation, a return on equity of 5.44 percent was realized. Twelve trailing months earnings per share reached a value of $3.07. Last fiscal year, the company paid $3.03 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.48, the P/S ratio is 2.59 and the P/B ratio is finally 1.24. The dividend yield amounts to 4.25 percent and the beta ratio has a value of 0.33.
Take a closer look at the full list of the safest dividend paying utilities. The average P/E ratio amounts to 18.41 and forward P/E ratio is 15.19. The dividend yield has a value of 4.24 percent. Price to book ratio is 1.87 and price to sales ratio 1.84. The operating margin amounts to 19.14 percent and the beta ratio is 0.48. Stocks from the list have an average debt to equity ratio of 1.44.
Here is the full table with some fundamentals (TTM):
Related stock ticker symbols:
CPL, EXC, CIG, FE, ETR, PPL, DUK, PEG, SO, ED, PCG, AEP, NGG, TRP, D, DTE,
XEL, CNP, NU, NEE
Disclosure: I am long ADP. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.