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Utilties remain an overlooked sector. In this article I analyze my best ideas from the space for consistent dividends. These utilities all operate in low cost areas with easy access to natural gas and coal for generation fuel.

Ameren (NYSE:AEE): Ameren supplies electricity and natural gas to its customers in Illinois, and Missouri. The company operates in both regulated and unregulated markets in these states. The first attempt at a price rise in the unregulated market (1997) in Illinois, resulted in a public outcry that ultimately put a 10-year price freeze on electricity rates and the second attempt (when the freeze was lifted in 2007) resulted in a similar reaction. The regulating agency stepped in and made Ameren decrease its rates, so the market is actually unregulated in name only. In my opinion, with the barriers to entry and the high infrastructure costs in this industry you will probably never see a true open market. In recent news the company filed for a rate increase in Missouri, and even if it is granted it takes almost a year for the increase to take effect. The company does however pay a nice dividend of $1.60 per share (annualized) that produces a dividend yield of 5.1% at the stock's current price. The dividend is paid out on a consistent basis and the payout ratio (trailing twelve months) is slightly higher than the industry average of 60%, coming in at 68%.

Duke Energy Corporation (NYSE:DUK): Duke Energy Corporation is among the top five electric utility companies in the United States. The company provides power to the disputably unregulated markets in Indiana, Ohio, North Carolina, South Carolina, and Kentucky. Because the company only produces 1/3 of its electricity from burning coal, it is not as exposed to the Environmental Protection Agency regulations involving the commodity as the average utility company. In addition to this comparative security the company has one of the best dividend histories in the industry. Duke Energy Corporation pays a dividend of $1 per share (annualized) that produces a dividend yield of 4.7% at the stock's current price. The dividend is paid out and raised on a consistent basis and the payout ratio (trailing twelve months) is higher than the industry average of 60%, coming in at 71%. The stock in the company has also shown significant capital appreciation over the past twelve months and is in a well established upward trend. The company's two closest competitors are CenterPoint Energy, Inc (NYSE:CNP) with a PEG ratio of 2.92 and Entergy Corporation (NYSE:ETR) with a PEG ratio of 6.02. Duke Energy Corporation is moderately priced by comparison with a PEG ratio of 3.26.

American Electric Power Company (NYSE:AEP): American Electric Power Company delivers electricity to 11 states and is one of the largest utility companies in the United States. Over 50% of the company's revenue comes from Ohio, Oklahoma, and Indiana. The stock in the company is notably coming off its 52-week high but is still following an established upward trend at this point. American Electric Power Company also pays a dividend of $1.88 per share (annually) that produces a dividend yield of 4.8% at the stock's current price. The dividend is paid out and raised on a consistent basis and the payout ratio (trailing twelve months) is lower than the industry average of 60%, coming in at 49%. In recent news the company has stated that it is shutting down some of its older coal-fired power plants to comply with federal environmental rules and holding back on building newer natural gas fired plants till uncertainty in the market evaporates. In my opinion, this year's election and the resulting clarity on energy policy will go a long way in clearing up this uncertainty. The company's two nearest competitors in this market are National Grid Transco (NYSE:NGG) with a PEG ratio of 3.01 and TECO Energy (NYSE:TE) with a PEG ratio of 3.69. American Electric Power Company is moderately priced by comparison with a PEG ratio of 3.10.

Great Plains Energy (NYSE:GXP): Great Plains Energy is a fully regulated electric and gas utility company that supplies these sources of energy to its customers in Missouri, and Kansas. The company is quite susceptible to price swings in coal and natural gas, along with carbon emissions legislation, as 82% of its electricity producing capabilities come from these commodities. Nuclear power accounts for 17% of the company's output. The stock itself has been range bound between $17 and $22 per share over the past twelve months and has recently been trading in the upper quartile of that range. Great Plains Energy also pays out a nice dividend of $.85 per share (annually) that produces a dividend yield of 4.1% at the stock's current price. The dividend is paid out and raised on a consistent basis and the payout ratio (trailing twelve months) is higher than the industry average of 60%, coming in at 70%. The company's two closest competitors in this market are Ameren Corporation with a five-year expected PEG ratio of -13.18 and Southern Union Company (NYSE:SUG) with a five-year expected PEG ratio of 4.86. Great Plains Energy is the cheaper of the trio with a five-year expected PEG ratio of 4.01.

Westar Energy (NYSE:WR): Westar Energy is small by national standards, with about 700,000 customers, but it is the largest electricity generating and distribution company in the wide spread state of Kansas. The most significant development involving the company is its joint venture with Prairie Wind Transmission, LLC and future wind farm plans in the area. I think this project if marketed correctly could produce a substantial revenue flow for the company. The open terrain and nearly constant windy weather patterns in this part of the country make the area ideal for this type of electricity generation. In addition to this growth prospect the company also pays a nice dividend of $1.28 per share (annually) that produces a dividend yield of 4.5% at the stock's current price. The dividend is paid out and raised on a consistent basis and the payout ratio (trailing twelve months) is slightly higher than the industry average of 60%, coming in at 69%. The company's two closest competitors in this market are Great Plains Energy Incorporate and Xcel Energy Inc. (NYSE:XEL). Great Plains Energy currently has a PEG ratio of 2.37 and a five-year earnings growth forecast of 7%. Xcel Energy Inc. currently has a PEG ratio of 2.89 and a five-year earnings growth forecast of 5.1%. Westar Energy has a relatively moderate stock value at this time with a PEG ratio of 2.62 for its five-year earnings growth forecast of 6.1%.

Source: 2012 Outlook: 5 Utilities To Buy For Profits Now