In the wildly volatile 2011 stock market investors flocked to dependable utility stocks with high dividend yields. As fears in Europe began to settle we saw fast money start to move away from this sector. As a result, utility stocks in general have underperformed the market for the last 6 months.
For those that have been waiting out this downtrend, it may be time to start averaging your way back into these stocks. Our favorite dividend stocks are those that have a history of raising their dividend. These 7 utility dividend stocks have a yield of 3% or more, 10 years of consecutive dividend increases and a 5 year dividend growth rate of 5% or more.
Northeast Utilities System (NU)
Northeast Utilities has multiple subsidiaries that provide electricity to residential and commercial customers. They serve the New Hampshire and Massachusetts areas. NU has raised its dividend for 12 consecutive years and currently has as a dividend yield of 3.1%. Its 5 year dividend growth rate is 8.7% and its payout ratio is 47%. NU has a 3 year net income growth rate of 16.3%.
New Jersey Resources Corporation (NYSE:NJR)
New Jersey Resources has a further reach than just the garden state. It is an energy services company that services customers all over the United States. Its three business segments are natural gas distribution, energy services and midstream assets. NJR has increased its dividend for the last 16 years and currently has a dividend yield of 3%. The 5 year dividend growth rate is 8.4%.
UGI Corporation (NYSE:UGI)
UGI is an international distributor of energy products and services. It distributes propane, butane and provide natural gas and electric service to its global customers. UGI has increased its dividend for 19 consecutive years. It has a dividend yield of 3.7% which is higher than its 5 year average of 3.1% suggesting it may be undervalued. UGI has a 5 year dividend growth rate of 8.2%.
PPL Corporation (NYSE:PPL)
PPL does a little bit of everything. It generates electricity from its power plants around the East and West Coasts. It then delivers that electricity to customers on the East Coast and UK. It also delivers natural gas to customers in Kentucky. PPL has increased its dividend for 12 years and has a dividend yield of 5.1%, which is also above the 5 year average of 4.4%. The 5 year dividend growth rate is 5%.
NextEra Energy (NYSE:NEE)
NextEra is an electric power company that operates in North America. It generates electricity though natural gas, wind, nuclear, oil, coal and solar with operations in 28 US States. NEE has increased its dividend for 16 years and has a dividend yield of 3.7%. Its 5 year dividend growth rate is 8% and payout ratio is 61%.
Suburban Propane Partners (NYSE:SPH)
Suburban Propane Partners is a limited partnership that provides multiple energy products to customers in 30 US States. It specializes in distributing fuel oil, propane and refined oils. SPH also installs and service heating and ventilation products. Suburban Propane has increased its dividend for 13 consecutive years and has a high dividend yield of 8.4% ,a full percentage point above its 5 year average. The 5 year dividend growth rate is 5.6%.
Inergy is a limited partnership that operates in two segments: propane operations and midstream operations. It sells and transports propane as well as stores natural gas for its customers. NRGY has increased its dividend for 10 years and has a big dividend yield of 15.7%. The 5 year dividend growth rate is 5.07%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.