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Recently, we compiled a list of top 30 U.S. Financial Stocks and showed that high dividend yielding financial stocks performed better than low dividend yielding ones in the last 52-week period. In another study, we showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. Dividend stocks beat the overall market by an average of 1.36% per year in that period.

We prefer high dividend stocks since they generally perform better and usually increase dividend payments over the next 5-10 years. Some sectors contain many high dividend stocks and may appear attractive to dividend lovers. In these sectors stocks' performances are usually more robust and correlated with higher dividend yields within.

Utilities sector is one of the high dividend yielding sectors. We compiled a list of top 30 U.S. Utilities Stocks (the sector classifications are sourced from Finviz) by market cap and ranked them based on their 12-month dividend yields. Here are these 30 stocks and their performances:

Dividend Yield

YTD Return

52-week Return

FirstEnergy Corp.

FE

5.5%

9.01%

12.62%

Ameren Corp.

AEE

5.3%

5.25%

16.99%

Duke Energy Corp.

DUK

5.2%

6.32%

18.60%

Progress Energy Inc.

PGN

5.2%

11.87%

27.65%

PPL Corporation

PPL

5.1%

5.62%

13.07%

Exelon Corp

EXC

5.0%

2.55%

2.20%

American Electric Power

AEP

4.8%

2.42%

14.04%

Entergy Corporation

ETR

4.8%

-0.07%

-8.55%

NiSource Inc.

NI

4.7%

12.91%

26.35%

Southern Company

SO

4.7%

4.13%

17.19%

SCANA Corp.

SCG

4.6%

3.39%

12.48%

Consolidated Edison Inc.

ED

4.6%

6.08%

20.95%

DTE Energy Co.

DTE

4.4%

11.54%

8.42%

Public Service Enterprise Group

PEG

4.3%

2.00%

6.54%

CenterPoint Energy

CNP

4.2%

18.87%

35.54%

Xcel Energy Inc.

XEL

4.2%

4.33%

18.24%

PG & E Corp.

PCG

3.9%

-2.28%

10.83%

NextEra Energy

NEE

3.6%

10.44%

16.48%

Edison International

EIX

3.2%

3.14%

22.51%

Dominion Resources

D

3.0%

9.63%

15.51%

Sempra Energy

SRE

3.0%

5.98%

14.96%

Northeast Utilities

NU

2.9%

11.89%

34.12%

ONEOK Inc.

OKE

2.8%

26.65%

46.58%

Wisconsin Energy Corp.

WEC

2.8%

6.44%

25.51%

Constellation Energy Group

CEG

2.6%

19.32%

2.23%

National Fuel Gas Co.

NFG

1.9%

11.59%

41.72%

EQT Corporation

EQT

1.7%

11.67%

14.52%

The AES Corp.

AES

0.0%

8.37%

13.01%

Calpine Corp.

CPN

0.0%

22.56%

24.24%

NRG Energy

NRG

0.0%

22.47%

1.57%

Average

3.6%

9.14%

17.54%

The average dividend yield of the top 30 U.S. Utilities Stocks is 3.6%, which is higher compared to other sectors in U.S. Only 3 stocks – AES, CPN and NRG – had no dividend yield in the past year, and the other 27 stocks had high dividend yields ranging between 1.7% and 5.5%. In the last 52-week period, the average return of these 30 stocks was 17.54%, beating the market averages. ETR was the only stock in the list, which had a negative performance during this period. The performance of the top 30 Utilities Stocks was still good since the beginning of the year. The average Year-To-Date return of these stocks is 9.14%, outperforming the market averages.

We prefer high dividend stocks over low dividend stocks since the former generally performs better than latter. Moreover, they provide better protection against inflation. Like Jim Rogers and Ray Dalio, we are concerned about the Fed's inflationary monetary policy, and stocks with higher dividend yields may be more preferable for the near future. Five utilities stocks with the highest dividend yields are as follows:

  1. First Energy Corp.: First Energy is an energy company involved in the generation, transmission and distribution of electricity. FE recently traded at $9.96 and it has a 5.5% dividend yield. FE returned 12.62% during the past 12 months, while it gained 9.01% since the beginning of the year. The stock has a market cap of $12.18B and P/E Ratio of 15.55.
  2. Ameren Corp.: Ameren is a holding company which supplies electricity and natural gas services. AEE has a 5.3% dividend yield and returned 16.99% to its investors during the past 12 months. AEE recently traded at $29.31 and returned 5.25% year-to-date. The stock has a market cap of $7.05 B and P/E ratio of 50.36.
  3. Duke Energy Corp.: Duke Energy is a large electric power company in the United States. DUK recently traded at $18.65 and has a 5.2% dividend yield. DUK gained 18.60% during the past 12 months, while it returned 6.32% to its investors in 2011. The stock has a market cap of $24.79B and P/E ratio of 18.61.
  4. Progress Energy Inc.: Progress Energy Inc. is an energy company providing electricity to its customers. PGN recently traded at $47.45 and has a high dividend yield of 5.2%. PGN performed well during the past 12 months and returned 27.65% to its investors. PGN gained 11.87% year-to-date. The stock has a market cap of $13.93B and P/E ratio of 16.11.
  5. PPL Corporation: PPL is an energy company that delivers electricity and natural gas in the United States and the United Kingdom. PPL has a 5.1% dividend yield and 13.07% during the past 12 months. PPL recently traded at $27.43 and gained 5.62% in 2011. The stock has a market cap of $13.29B and P/E ratio of 12.69. PPL is also one of the dividend stocks that hedge funds love.

We strongly believe that these 30 stocks as a portfolio will beat the 10-year Treasury bonds. It is also very likely that the outperformance will be substantial. Investors should consider building a diversified portfolio of high dividend utilities as an alternative to investing in long-term government bonds.

Source: Investing in High Dividend Yielding Utilities