15 U.S. Electric Utilities Paying Over 5% Dividends

by: David Hunkar

Charlotte-NC, based Duke Energy (NYSE:DUK) has announced a deal to buy Progress Energy Inc (PGN) for $13.7 billion in an all-stock transaction. The combined company to be called Duke Energy Corp would be the largest utility in the U.S. with about 7.1 million customers in the states of Florida, North Carolina, South Carolina, Indiana, Kentucky and Ohio.

Back in 2005 Duke Energy acquired Cincinnati, OH-based Cinergy for $9.0 billion in stock to expand its business in the Midwest.

From a Reuters report:

Duke said Progress Energy shareholders would receive 2.6125 shares of common stock of Duke Energy for each share held, or $46.48 per share, representing a 4 percent premium to the stock’s Friday close on the New York Stock Exchange.

Duke Energy said it also will assume about $12.2 billion in Progress Energy’s debt. The company also expects to effect a reverse stock split immediately prior to closing.

The electric utility industry in the U.S. is highly regulated and is very competitive. These companies are the favorites of long-term and income investors as they tend to have slow and steady growth with high and consistent dividend yields. The table below lists 15 electric utilities paying dividends of over 5%:

S.No. Name Ticker Dividend Yield as of Jan. 6, 2011 Market Capitalization
1 Ameren Corporation AEE 5.41% $6.8B
2 American Electric Power Company, Inc. AEP 5.04% $17.4B
3 Duke Energy Corporation DUK 5.46% $23.5B
4 The Empire District Electric Company EDE 5.78% $910.3M
5 FirstEnergy Corp. FE 5.81% $11.6B
6 Hawaiian Electric Industries, Inc. HE 5.20% $2.2B
7 NiSource Inc. NI 5.15% $5.0B
8 Progress Energy, Inc. PGN 5.67% $12.9B
9 Pinnacle West Capital Corporation PNW 5.04% $4.5B
10 Pepco Holdings, Inc. POM 5.89% $4.1B
11 PPL Corporation PPL 5.20% $12.9B
12 UIL Holdings Corporation UIL 5.79% $1.5B
13 Unitil Corporation UTL 6.00% $250.2M
14 Integrys Energy Group, Inc. TEG 5.57% $3.7B
15 Brookfield Infrastructure Partners L.P. BIP 5.21% $3.4B

Disclosure: Author long DUK, NI