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Recently, we argued that large-cap utilities may appear attractive to dividend investors since these stocks have higher dividend yields compared to other sectors in the U.S. The utilities sector generally contains high dividend stocks, and most mid-cap utilities are no exception.

We like high dividend stocks because we are concerned about the Fed’s inflationary policies and large budget deficits. We compiled a list of utilities stocks (the sector classifications are sourced from Finviz) that have a market cap between $2B and $7B and ranked them based on their 12-month dividend yields. Here are these 33 stocks and their performances:

Dividend Yield

YTD Return

52-week Return

AmeriGas Partners

APU

6.3%

-4.39%

26.4%

Pepco Holdings Inc.

POM

5.5%

9.67%

33.1%

Integrys Energy Group Inc.

TEG

5.2%

9.68%

22.2%

Hawaiian Electric

HE

5.1%

10.25%

19.9%

Vectren Corp.

VVC

4.9%

13.50%

31.7%

SCANA Corp.

SCG

4.7%

0.80%

18.4%

Pinnacle West Capital

PNW

4.7%

10.91%

36.8%

Westar Energy Inc.

WR

4.6%

8.05%

30.8%

NiSource Inc.

NI

4.6%

17.15%

47.6%

TECO Energy Inc.

TE

4.4%

7.93%

30.2%

AGL Resources Inc.

AGL

4.4%

14.89%

18.3%

DPL Inc.

DPL

4.2%

19.71%

28.4%

Atmos Energy Corp.

ATO

4.1%

7.68%

30.2%

Alliant Energy Corp.

LNT

4.1%

12.01%

35.2%

Great Plains Energy

GXP

4.0%

8.95%

27.5%

CMS Energy Corp.

CMS

3.9%

8.90%

43.8%

Piedmont Natural Gas Co.

PNY

3.6%

11.77%

28.8%

NSTAR

NST

3.6%

10.94%

39.4%

Nicor Inc.

GAS

3.4%

9.70%

40.6%

UGI Corp.

UGI

3.1%

2.27%

32.9%

Cleco Corporation

CNL

3.0%

13.08%

36.6%

NV Energy Inc.

NVE

3.0%

10.84%

36.8%

Northeast Utilities

NU

2.9%

11.80%

43.5%

American Water Works

AWK

2.9%

18.7%

52.8%

OGE Energy Corp.

OGE

2.9%

12.33%

48.0%

Aqua America Inc.

WTR

2.7%

-0.36%

33.6%

Southern Union Co.

SUG

2.0%

24.85%

48.2%

National Fuel Gas Co.

NFG

2.0%

7.35%

53.7%

ITC Holdings Corp.

ITC

1.8%

16.99%

50.4%

Energen Corp.

EGN

0.9%

21.46%

36.4%

NRG Energy Inc.

NRG

0.0%

26.41%

13.9%

GenOn Energy Inc.

GEN

0.0%

6.04%

0.2%

Covanta Holding Corp.

CVA

0.0%

-5.26%

8.6%

AVERAGE

3.4%

10.74%

32.87%

The average dividend yield of 33 mid-cap utilities is 3.4%, which is higher compared to other sectors in the U.S. Only 3 stocks - NRG, GEN and CVA - had no dividends in the past 12 months, and the other 30 stocks had high dividend yields ranging between 0.9% and 6.3%. In the last 52-week period, the average return of these 33 stocks was 32.87%, outperforming the market averages. Moreover, there are no stocks in the list which had a negative performance during this period. The performance of these mid-cap utilities was also solid since the beginning of the year. The average YTD return of these stocks is 10.74%, beating the market averages.

As we are concerned about the Fed’s monetary policy, we believe investors should be more cautious and invest in the stocks with higher dividend yields. We think a portfolio of 30 stocks with dividends should provide protection against a downturn in the stock market. These stocks should be able to perform much better than long-term treasury bonds over the next 10 years as well. Mid-cap utilities with the highest dividend yields are as follows:

1. AmeriGas Partners ((NYSE:APU)): AmeriGas Partners is a U.S. company distributing retail propane gas in the United States. APU has a high dividend yield of 6.3% and returned 26.4% during the past 12 months. However, APU lost -4.39% year-to-date. The stock has a market cap of $2.95B and P/E ratio of 17.62. Jim Simons’ Renaissance Technologies and Ken Griffin’s Citadel Investment are among APU investors.

2. Pepco Holdings Inc. ((NYSE:POM)): Atlantic Power Corp. is a U.S. company supplying electricity, natural gas and providing related services in the United States. POM has a 5.5% dividend yield and returned 33.1% during the past 12 months. POM recently traded at $19.80 and gained 9.67% since the beginning of this year. The stock has a market cap of $4.47B. Jim Simons’ Renaissance Technologies , Ken Griffin’s Citadel Investment and Cliff Asness’ AQR Capital hold POM positions.

3. Integrys Energy Group Inc. ((NYSE:TEG)): Integrys Energy Group Inc. is a holding company delivering regulated electricity and natural gas utilities. TEG has a 5.2% dividend yield and returned 22.2% during the past 12 months. TEG recently traded at $51.89 and gained 9.68% since the beginning of this year. The stock has a market cap of $4.04B and P/E Ratio of 13.82. Jim Simons’ Renaissance Technologies and Cliff Asness’ AQR Capital have the two largest positions in TEG among 300-plus funds we are tracking.

4. Hawaiian Electric ((NYSE:HE)): Hawaiian Electric is a large utility company providing electricity in the state of Hawaii. HE has a 5.1% dividend yield and returned 19.9% during the past 12 months. HE also performed well in 2011 and gained 10.25% year-to-date. HE recently traded at $24.52. The stock has a market cap of $2.34B and P/E Ratio of 20.10. Phill Gross, Jim Simons and D.E. Shaw are among HE investors.

5. Vectren Corp. ((NYSE:VVC)): Vectren Corp. is an energy company delivering natural gas in the United States. VVC has a 4.9% dividend yield and returned 31.7% during the past 12 months. VVC also performed well since the beginning of this year and gained 13.50% year-to-date. VVC recently traded at $28.14. The stock has a market cap of $2.30B and P/E Ratio of 19.84. David Dreman’s Dreman Value Management has the largest position in VVC. Jim Simons and Ken Griffin also hold VVC.

6. SCANA Corp. ((NYSE:SCG)): SCANA Corp. is a holding company providing electricity to both retail and wholesale customers in the United States. SCG has a 4.7% dividend yield and returned 18.4% during the past 12 months. SCG recently traded at $40.45 and gained 0.80% since the beginning of this year. The stock has a market cap of $5.19B and P/E Ratio of 13.61. Phill Gross’ Adage Capital, Ken Heebner’s Capital Growth and Louis Bacon’s Moore Global have the largest positions in SCG.

7. Pinnacle West Capital ((NYSE:PNW)): Pinnacle West Capital is a holding company delivering electricity primarily in the state of Arizona. PNW has a 4.7% dividend yield and returned 36.8% during the past 12 months. PNW also performed well in 2011 and gained 10.91% year-to-date. PNW recently traded at $45.01. The stock has a market cap of $4.91B and P/E Ratio of 14.44. Phill Gross and Jim Simons are among PNW investors.

8. Westar Energy Inc. ((NYSE:WR)): Westar Energy Inc. is a utility company providing electricity mainly in the state of Kansas. WR has a 4.6% dividend yield and returned 30.8% during the past 12 months. WR recently traded at $26.92 and returned 8.05% in 2011. The stock has a market cap of $3.06B and P/E Ratio of 15.02. Jim Simons’ Renaissance Technologies had the largest position in WR.

9. NiSource Inc. ((NYSE:NI)): NiSource Inc. is a holding company providing electricity, natural gas and related services in the United States. NI has a 4.6% dividend yield and returned 47.6% during the past 12 months. NI also performed well since the beginning of the year and gained 17.15% year-to-date. NI recently traded at $20.15. The stock has a market cap of $5.64B and P/E Ratio of 18.94. Adage Capital, Magnetar Capital and Millenium Management hold the largest positions in NI.

10. TECO Energy Inc. ((NYSE:TE)): TECO Energy Inc. is an energy company generating and distributing electricity in the state of Florida. TE has a 4.4% dividend yield and returned 30.2% during the past 12 months. TE recently traded at $18.91 and returned 7.93% since the beginning of this year. The stock has a market cap of $4.06B and P/E Ratio of 17.35. David Dreman’s Dreman Value Management has the largest position in TE. Phill Gross’ Adage Capital, Israel Englander’s Millenium Management and Clint Carlson’s Carlson Capital also invested in TE.

Source: 30 High Dividend Mid-Cap Utilities for Defensive Investors