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This list is meant to serve as a starting point for investors. A lot of data has been provided so it should be relatively easy for an investor to scroll down the list and decide if the stock warrants further attention. If you find the stock appealing, you can dig deeper and see if meets with your investment criteria. Investors should not base their decision on yield alone. There are many stocks that offer extremely high yields, but their performance over the years has been anything but spectacular. Companies with stellar records will do everything possible to avoid cutting the dividend in order to maintain this record. To help the novice investor we have put out this guide, which could prove to be useful in the selection process. "Our suggested guidelines when searching for new investment ideas. Out of the three companies covered in this list Duke Energy Corp (DUK) and Southern Company (SO) are stronger from a relative strength and performance perspective.

Company: Duke Energy Corp

Basic overview

  1. Beta = 0.16
  2. 52 week change = 27.3%
  3. Operating cash flow = 3.96B
  4. Levered free cash flow = - 1.42B
  5. Long term debt to equity = 0.84
  6. EPS vs 1 year ago = 1.60
  7. Relative Strength 52 weeks = 84
  8. Short percentage of float = 5.9%
  9. Cash Flow 5-year Average = 2.85
  10. Sales vs 1 year ago = 1.8
  11. Long term debt to equity= 0.84

Growth

  1. Net Income ($mil) 12/2011 = 1706
  2. Net Income ($mil) 12/2010 = 1320
  3. Net Income ($mil) 12/2009 = 1075
  4. Net Income Reported Quarterly ($mil) = 295
  5. EBITDA ($mil) 12/2011 = 5350
  6. EBITDA ($mil) 12/2010 = 5044
  7. EBITDA ($mil) 12/2009 = 4428
  8. Cash Flow ($/share) 12/2011 = 2.98
  9. Cash Flow ($/share) 12/2010 = 2.93
  10. Cash Flow ($/share) 12/2009 = 2.63
  11. Sales ($mil) 12/2011 = 14529
  12. Sales ($mil) 12/2010 = 14272
  13. Sales ($mil) 12/2009 = 12731
  14. Annual EPS before NRI 12/2007 = 1.25
  15. Annual EPS before NRI 12/2008 = 1.21
  16. Annual EPS before NRI 12/2009 = 1.22
  17. Annual EPS before NRI 12/2010 = 1.43
  18. Annual EPS before NRI 12/2011 = 1.46

Dividend history

  1. Dividend Yield = 4.5%
  2. Dividend Yield 5 Year Average = 5.37
  3. Dividend 5 year Growth = 19

Dividend sustainability

  1. Payout Ratio = 0.89
  2. Payout Ratio 5 Year Average = 0.7
  3. Change in Payout Ratio = -0.01

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4.67
  2. 5 Year History EPS Growth = 2.08
  3. ROE 5 Year Average = 8.53
  4. Current Ratio = 1.38
  5. Current Ratio 5 Year Average = 1.26
  6. Quick Ratio = 0.96
  7. Cash Ratio = 0.61
  8. Interest Coverage = 3.5

Notes

Long term this is still a good play. It is overbought at present and appears to be putting in a top. We would wait for strong correction before jumping in. Consider opening up positions at 60 or better. An even better method to lock in lower prices would be to wait for it to test the 60 ranges and then sell short term in the money puts. With this strategy you will have a high probability of having the shares assigned to your account and at a lower price than buying it outright at 60, if it trades down to that range.

Company: Pepco Holdings (POM)

Basic Key ratios

  1. Percentage Held by Insiders = 0.28
  2. Relative Strength 52 weeks = 64
  3. Short interest ratio= 16%
  4. 52 week change = 13.2%
  5. Beta= 0.31
  6. Quarterly revenue growth = -20%
  7. 5 year dividend average = 5.5%
  8. Quarterly revenue growth = 6.2%
  9. Cash Flow 5 -year Average = 3.11
  10. Operating cash flow = $512M
  11. Levered Free Cash Flow = $- 272 million
  12. Sales vs quarter 1 year ago = -20%
  13. Sales vs 1 year ago = -16%
  14. 5 year EPS growth rate = -8%
  15. EPS vs 1 year ago = 6.3

Growth

  1. Net Income ($mil) 12/2011 = 257
  2. Net Income ($mil) 12/2010 = 32
  3. Net Income ($mil) 12/2009 = 235
  4. EBITDA ($mil) 12/2011 = 1089
  5. EBITDA ($mil) 12/2010 = 849
  6. EBITDA ($mil) 12/2009 = 1016
  7. Cash Flow ($/share) 12/2011 = 3.12
  8. Cash Flow ($/share) 12/2010 = 2.98
  9. Cash Flow ($/share) 12/2009 = 2.49
  10. Sales ($mil) 12/2011 = 5920
  11. Sales ($mil) 12/2010 = 7039
  12. Sales ($mil) 12/2009 = 9259
  13. Annual EPS before NRI 12/2007 = 1.53
  14. Annual EPS before NRI 12/2008 = 1.93
  15. Annual EPS before NRI 12/2009 = 0.91
  16. Annual EPS before NRI 12/2010 = 1.24
  17. Annual EPS before NRI 12/2011 = 1.25

Dividend history

  1. Dividend Yield = 5.4
  2. Dividend Yield 5 Year Average = 5.50
  3. Dividend 5 year Growth = 0.78

Dividend sustainability

  1. Payout Ratio = 0.93
  2. Payout Ratio 5 Year Average = 0.81

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4
  2. ROE 5 Year Average = 7.13
  3. Return on Investment = 3.2
  4. Debt/Total Cap 5 Year Average = 52.54
  5. Current Ratio = 0.60
  6. Current Ratio 5 Year Average = 0.95
  7. Quick Ratio = 0.4
  8. Cash Ratio = 0.2
  9. Interest Coverage Quarterly = 2.50

Notes

Out of the 3 plays this is probably the weakest one of the lot, but it has held up rather well in this volatile market. Consider waiting for a test of the 17.50-18.00 ranges before jumping in.

Company: Southern Company

Brief Overview

  1. Percentage Held by Insiders = 0.49
  2. Relative Strength 52 weeks = 81
  3. Cash Flow 5-year Average = 4.41
  4. Profit Margin = 12.8%
  5. Operating Margin = 24 %
  6. Quarterly Revenue Growth = -7.00%
  7. Quarterly Earnings Growth = 3.00%
  8. Beta = 0.13
  9. 52 week change = 23%
  10. Percentage Held by Institutions = 43.4%
  11. Short Percentage of Float = 1.00%
  12. Sales vs 1 year ago = 1.2
  13. EPS vs 1 year ago = 3.2
  14. 5 year sales growth rate = 2.6%

Growth

  1. Net Income ($mil) 12/2011 = 2268
  2. Net Income ($mil) 12/2010 = 2040
  3. Net Income ($mil) 12/2009 = 1708
  4. Net Income Reported Quarterly ($mil) = 368
  5. EBITDA ($mil) 12/2011 = 6392
  6. EBITDA ($mil) 12/2010 = 5792
  7. EBITDA ($mil) 12/2009 = 5297
  8. Cash Flow ($/share) 12/2011 = 5.01
  9. Cash Flow ($/share) 12/2010 = 4.66
  10. Cash Flow ($/share) 12/2009 = 4.62
  11. Sales ($mil) 12/2011 = 17657
  12. Sales ($mil) 12/2010 = 17456
  13. Sales ($mil) 12/2009 = 15743
  14. Annual EPS before NRI 12/2007 = 2.24
  15. Annual EPS before NRI 12/2008 = 2.37
  16. Annual EPS before NRI 12/2009 = 2.32
  17. Annual EPS before NRI 12/2010 = 2.37
  18. Annual EPS before NRI 12/2011 = 2.57

Dividend history

  1. Dividend Yield = 4.10
  2. Dividend Yield 5 Year Average = 4.6
  3. Dividend 5 year Growth = 3.8

Dividend sustainability

  1. Payout Ratio 03/2012 = 0.77
  2. Payout Ratio 5 Year Average = 0.74

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 5.04
  2. ROE 5 Year Average = 13.53
  3. Current Ratio = 0.96
  4. Current Ratio 5 Year Average = 0.98
  5. Quick Ratio = 0.61
  6. Cash Ratio = 0.41
  7. Interest Coverage Quarterly = 3.77

Notes

This is another good long-term play, but it's overbought at present and appears to be putting in a top. Consider waiting for a test of the 42 ranges before committing fresh money to this play. If you presently have a position in this play, consider selling covered calls with strikes at 50 or higher. This will provide you with some downside protection if the stock should experience a stronger correction. If the stock does trade past the strike, you sold the calls at, you can roll the call to prevent your shares from being called away.

Conclusion

In general if you like a company but find that the stock is trading above your entry point, then you should consider selling puts at strikes you would not mind owning the stock at. The benefit of this strategy is that it allows you to get into at a predetermined price or get paid for trying to. When you put in a limit order, you do not get paid for your efforts if the stock does not trade down to your entry price. As the markets are volatile and overbought, investors should tread with caution. The ideal situation would be to wait for a much stronger decline before deploying committing large amounts of money to any given play.

Disclaimer

This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware

Source: 3 Interesting Utility Plays To Consider

Additional disclosure: EPS, company Vs industry, EPS surprises charts/data obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com. Earnings estimates sourced from dailyfinance.com.