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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.

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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 (NYSE: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.



2. CH Energy Group Inc. (NYSE:CHG): Diversified Utilities Industry. Market cap of $777.56M. Dividend yield at 4.34%. According to Audit Integrity, the company has Conservative accounting practices, with an AGR score of 89. Risk-averse investors may appreciate that CHG has a relatively low correlation to the market (beta = 0.4). The stock appears to have good liquidity to back up its dividend -- current ratio at 1.76 and quick ratio at 1.61. The stock has gained 23.74% over the last year.



3. DPL Inc. (NYSE:DPL): Diversified Utilities Industry. Market cap of $3.23B. Dividend yield at 4.83%. According to Audit Integrity, the company has Conservative accounting practices, with an AGR score of 89. DPL has a relatively low correlation to the market (beta = 0.6), which may be appealing to risk-averse investors. The stock is a short squeeze candidate, with a short float at 5.18% (equivalent to 8.35 days of average volume). The stock has gained 6.05% over the last year.



4. Alliant Energy Corporation (NYSE:LNT): Diversified Utilities Industry. Market cap of $4.25B. Dividend yield at 4.44%. According to Audit Integrity, the company has Conservative accounting practices, with an AGR score of 87. The stock has gained 16.1% over the last year.

5. ALLETE, Inc. (NYSE:ALE): Diversified Utilities Industry. Market cap of $1.39B. Dividend yield at 4.61%. According to Audit Integrity, the company has Average accounting and governance risk, with an AGR score of 83. The stock has gained 14.95% over the last year.

6. AmeriGas Partners LP (NYSE:APU): Gas Utilities Industry. Market cap of $2.65B. Dividend yield at 6.09%. According to Audit Integrity, the company has Average accounting and governance risk, with an AGR score of 79. The stock has gained 17.98% over the last year.

7. Vectren Corporation (NYSE:VVC): Diversified Utilities Industry. Market cap of $2.20B. Dividend yield at 5.11%. According to Audit Integrity, the company has Average accounting and governance risk, with an AGR score of 77. The stock has gained 14.71% over the last year.

8. Hawaiian Electric Industries Inc. (NYSE:HE): Electric Utilities Industry. Market cap of $2.32B. Dividend yield at 5.08%. According to Audit Integrity, the company has Average accounting and governance risk, with an AGR score of 76. The stock has gained 13.11% over the last year.

9. Xcel Energy Inc. (NYSE:XEL): Electric Utilities Industry. Market cap of $11.49B. Dividend yield at 4.25%. According to Audit Integrity, the company has Average accounting and governance risk, with an AGR score of 70. The stock has gained 15.52% over the last year.

*AGR score sourced from Audit Integrity, dividend yield and all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Defensive Ideas: 9 High Dividend Utilities With Conservative Accounting Risk