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Utilities are one of my favorite areas of the market. Although the stocks of these companies generally do not demonstrate much in the way of capital appreciation, the regulated utilities have geographic monopolies and what amounts to guaranteed profits and return on equity. In this article I analyze my best ideas for hefty dividends and some potential appreciation.

CH Energy Group (CHG): CH Energy Group is currently in a well established upward trend that has carried it from $48 per share a year ago to over $57 per share as of today. In addition to this capital appreciation the company also pays out a dividend of $2.22 per share bringing the dividend yield in at 3.8%. This dividend is paid out on a consistent basis. The payout ratio on the dividend is 59% of the company's earnings which is in line with the industry average of 60%. The company's closest publicly traded competitor in this market is Consolidated Edison, Inc. (NYSE:ED) with a peg ratio of 4.33 and a five year earnings growth forecast of 3.7%. CH Energy Group is slightly more expensive in terms of growth with a peg ratio of 5.03 and its five year earnings growth forecast of 4%. Although 90% of the company's revenues come from supplying electric and gas power to New York State's Hudson River area the company is well diversified in other respects. CH Energy Group is involved in a number of alternative and renewable fuel projects in New Jersey, New Hampshire, New York, Wisconsin and Pennsylvania as well as a corn-ethanol plant in Nebraska. In my opinion these projects represent future growth opportunities for the company which include: cogeneration, wind generation, biomass energy projects and landfill gas projects.

Consolidated Edison : Consolidated Edison is currently in a well established upward trend that has taken the stock from $50 per share a year ago the $60 per share range of today. In addition to this capital appreciation the company also pays out a dividend of $2.42 per share bringing the dividend yield in at 4.1%. This dividend is paid out and raised on a fairly consistent basis. The payout ratio on the dividend is 67% of the company's earnings which is slightly higher than the industry average of 60%. The company's two main competitors in this market are American Electric Power Company (NYSE:AEP) with a PEG ratio of 3.10 and Constellation Energy Group, Inc (NYSE:CEG) with a PEG ratio of 3.41. Consolidated Edison with a PEG ratio of 4.33 is more expensive in terms of growth prospects. Consolidated Edison is a fully regulated utility company providing electricity, natural gas and steam to New York City. The company also provides electric and natural gas services to parts of New Jersey and parts of Pennsylvania. In my opinion, Consolidated Edison is one of the lowest risk utility stocks in the sector and with the benefits of smart-grid technologies that will be at its disposal in the near future the company's profit margins will equally benefit.

PPL (PPL): PPL is at present in a well established upward trend that has taken the stock from $25 per share a year ago the $30 per share range of today. The company also pays out a dividend of $1.40 per share bringing the dividend yield in at 5.1%. This dividend is paid out and raised on a fairly consistent basis. The payout ratio on the dividend is 54% of the company's earnings which is slightly lower than the industry average of 60%. The company's two main competitors in this market are American Electric Power Company with a five year expected PEG ratio of 3.26 and FirstEnergy Corporation (NYSE:FE) with a five year expected PEG ratio of 8.97. PPL is much cheaper by comparison with its five year expected PEG ratio of 1.40. PPL is one of the oldest utility companies in the United States. The company generates and distributes electricity in the United States and the United Kingdom. PPL also distributes natural gas and propane to Maryland, Pennsylvania and Delaware. The company operates power plants and distributes electricity to Montana, Illinois, Pennsylvania, Connecticut, New York and Maine. In the company's most recent earnings report revenues doubled and earnings rose 13%-- the company also increased its dividend by 2.9%. I think the company's revenues will continue to increase in the short time as it completes the integration of the two Kentucky utilities it purchased in 2010.

CenterPoint Energy, Inc (CNP): CenterPoint Energy is currently range bound between $17 and $22 per share. The company does however pay out a dividend of $0.81 per share amounting to a dividend yield of 4.3%. This dividend is paid out and raised on a fairly consistent basis. The payout ratio on the dividend is 25% of the company's earnings which is much lower than the industry average of 60%. The company's two main competitors in this market are American Electric Power Company with a five year expected PEG ratio of 3.26 and Xcel Energy Inc. (NYSE:XEL) with a five year expected PEG ratio of 3.06. CenterPoint Energy is much cheaper by comparison with its five year expected PEG ratio of 2.78. CenterPoint Energy is also one of the oldest utility companies in the United States. The company was founded in 1882 in Houston, Texas and supplies transmission and distribution services to retail electric providers. CenterPoint Energy also provides natural gas distribution to regulated intrastate natural gas markets and operates over 8,000 miles of natural gas pipelines and 6 natural gas storage fields. The company also provides gas gathering, treating, and processing. In my opinion, the company will continue to outperform in light of its three consecutive quarters of beating Wall Street estimates and future revenue growth estimates to more than double.

Pinnacle West Capital Corporation (PNW): Pinnacle West Capital Corporation is currently in a well established upward trend that has taken the stock from $42 per share a year ago to the $47 to $48 per share range of today. In addition to this capital appreciation the company also pays out a dividend of $2.10 per share bringing the dividend yield in at 4.4%. This dividend is paid out on a consistent basis. The payout ratio on the dividend is 72% of the company's earnings which is higher than the industry average of 60%. The company's two main competitors in this market are Southwest Gas Corporation (NYSE:SWX) with a five year expected PEG ratio of 8.80 and UniSource Energy Corporation Co (NYSE:UNS) with a five year expected PEG ratio of 4.55. Pinnacle West Capital is cheaper by comparison with its five year expected PEG ratio of 3.42. The company's major operations are based in Arizona where it provides retail and wholesale electric services. Pinnacle West is well diversified and produces its electricity through several different sources including coal, nuclear, gas and oil as well as solar power. In my opinion, the company stands to benefit in the long run through the diversification of its electricity producing resources. The advantage of the company's location (desert) and its investment in solar energy being the most noteworthy of these resources.

Source: Buy These 5 Utilities For Profits Now