Top 30, High Dividend Utilities Stocks

|
 |  Includes: AEE, AEP, AES, CEG, CNP, CPN, D, DTE, DUK, ED, EIX, EQT, ES, ETR, EXC, FE, NEE, NFG, NI, NRG, OKE, PCG, PEG, PPL, SCG, SO, SRE, WEC, XEL
by: Insider Monkey

In a recent article, we compiled a list of top 30 S&P 500 Financial Stocks and showed that high dividend yielding financial stocks performed better than low dividend yielding ones since the beginning of this year. 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. The utilities sector is one high dividend yielding sector. We compiled a list of the top 30 US Utilities Stocks by market cap and ranked them based on their annualized dividend yields. (The sector classifications are sourced from Finviz and the market data are sourced from Fidelity)

Here are the 30 stocks and their performances in 2011:

Dividend Yield

YTD Return

Duke Energy Corp.

DUK

5.38%

7.38%

Ameren Corporation

AEE

5.34%

5.61%

Progress Energy Inc.

PGN

5.31%

13.15%

PPL Corporation

PPL

5.02%

9.28%

American Electric Power Co.

AEP

4.99%

7.90%

Entergy Corporation

ETR

4.97%

-4.02%

SCANA Corp.

SCG

4.95%

-1.14%

FirstEnergy Corp.

FE

4.93%

24.39%

Southern Company

SO

4.77%

7.57%

Exelon Corp.

EXC

4.77%

9.13%

DTE Energy Co.

DTE

4.76%

11.48%

NiSource Inc.

NI

4.57%

18.28%

Consolidated Edison Inc.

ED

4.55%

8.92%

PG & E Corp.

PCG

4.39%

-11.36%

Xcel Energy Inc.

XEL

4.33%

4.30%

Public Service Entreprise Group

PEG

4.18%

4.91%

Dominion Resources

D

4.07%

16.19%

CenterPoint Energy Inc.

CNP

4.03%

27.26%

NextEra Energy Inc.

NEE

3.97%

8.71%

Sempra Energy

SRE

3.79%

-2.13%

Wisconsin Energy Corp.

WEC

3.39%

5.95%

Edison International

EIX

3.36%

0.00%

Northeast Utilities

NU

3.24%

9.21%

ONEOK Inc.

OKE

3.08%

34.35%

Constellation Energy Group

CEG

2.47%

28.88%

National Fuel Gas Co.

NFG

1.96%

11.33%

EQT Corporation

EQT

1.39%

43.92%

The AES Corporation

AES

0.00%

0.00%

Calpine Corp.

CPN

0.00%

20.84%

NRG Energy Inc.

NRG

0.00%

25.08%

AVERAGE

3.73%

11.51%

Click to enlarge

The average dividend yield of the top 30 U.S. Utilities Stocks is 3.73%, which is higher compared to other sectors. Only three stocks – AES, CPN and NRG – had no annualized dividend yield. All other stocks except three – CEG, NFG and EQT – have an annualized dividend yield over 3%. Since the beginning of this year, the average return of these 30 stocks was 11.51%, beating the market by a large margin.

Here are the top ten U.S. Utilities stocks with the highest dividend yields:

Duke Energy Corp: DUK is a large nuclear power company in the United States. DUK has a 5.38% dividend yield and returned 7.38% since the beginning of this year. The stock has a market cap of $24.76B and P/E Ratio of 17.88. Clint Carlson holds more than $20 Million of DUK. (See Clint Carlson’s top stock picks here)

Ameren Corporation: AEE is an American utilities company which provides electricity and natural gas transmission and distribution services. AEE has a 5.34% dividend yield and returned 5.61% since the beginning of this year. The stock has a market cap of $6.94B and P/E Ratio of 65.50. Phill Gross, David Dreman and Ray Dalio are prominent AEE investors.

Progress Energy Inc.: PGN is a US company which generates and transmits electricity mainly in North Carolina, South Carolina and Florida. PGN has a 5.31% dividend yield and gained 13.15% since the beginning of this year. The stock has a market cap of $13.92B and P/E Ratio of 16.24. Cliff Asness’ AQR Capital had more than $30 Million in PGN at the end of March 2011.

PPL Corporation: PPL is an energy company that delivers electricity and natural gas in the United States and the United Kingdom. PPL has a 5.02% dividend yield and returned 9.28% since the beginning of this year. The stock has a market cap of $16.10B and P/E Ratio of 11.97. Richard Schimel’s Diamondback Capital has the largest PPL position, holding more than $75 Million of the stock.

American Electric Power Co.: AEP is an electric utilities company that generates and distributes electric power to retail clients in the United States. AEP has a 4.99% dividend yield and gained 7.90% since the beginning of this year. The stock has a market cap of $18.25B and P/E Ratio of 12.66. Israel Englander, Steven Cohen and Phill Gross are prominent AEP investors. (Check out Steven Cohen's favorite stocks).

Entergy Corporation: ETR is an energy company that produces and distributes electric power. ETR has a 4.97% dividend yield but lost -4.02% since the beginning of this year. The stock has a market cap of $11.82B and P/E Ratio of 9.61. Glen Russel Dublin's Highbridge Capital, Clint Carlson's Carlson Capital and Cliff Asness' Aqr Capital hold the largest positions in ETR among the 300+ funds we are tracking.

SCANA Corp.: SCG is an American energy company providing electricity to retail and wholesale customers. SCG has a 4.95% dividend yield but lost -1.14% since the beginning of this year. The stock has a market cap of $5.01B and P/E Ratio of 13.23. Phill Gross, Lois Bacon, Ken Heebner, Jim Simons and Israel Englander are prominent SCG investors.

First Energy Corp.: FE is a US energy company that delivers electricity to many areas, including Ohio, Pennsylvania, West Virginia, Maryland, and New Jersey. FE has a 4.93% dividend yield and gained 24.39% since the beginning of this year. The stock has a market cap of $18.75B and P/E Ratio of 20.19. Jean-Marie Eveillard holds more than $400 million of FE.

Southern Company: SO is another U.S. electricity utilities company on our list. SO has a 4.77% dividend yield and returned 7.57% since the beginning of this year. The stock has a market cap of $33.68B and P/E Ratio of 16.88. Phill Gross’ Adage Capital and Clint Carlson’s Carlson Capital are among SO investors.

Exelon Corp.: EXC is an energy company delivering electricity and natural gas in the United States. EXC has a 4.77% dividend yield and gained 9.13% since the beginning of this year. The stock has a market cap of $29.36B and P/E Ratio of 11.08. Michael Messner's Seminole Capital and Bruce Kovner's Caxton Associates are among prominent EXC investors.

We strongly believe that these 30 stocks as a portfolio will beat 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.

Disclosure: I am long PEG, FE.