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The Utilities sector may not look very appealing, considering that the rest of the U.S. equity market has posted strong gains so far this year. The sector also did not perform well compared to the benchmark indexes. However, the U.S. economy is not out of the woods yet. There have been some positive developments in the eurozone. However, the region's debt crisis is far from over. Meanwhile, the Chinese economy continues to see a slowdown. Add to these the U.S. fiscal cliff and the macroeconomic environment, thus, remains uncertain. Therefore, including some defensive stocks in your portfolio is not such a bad idea after all. Defensive stocks are, by my definition, stocks that you buy not because of their upside potential, but because they provide regular income in the form of dividends. This also means that you enter into positions with these stocks ideally at a low point in their price-to-time graph. That ensures you do not spend too much in constructing your defensive strategies.

The following utilities stocks are looking good from both angles. Since the overall utilities sector is down, one can assume one does not need to pay premium prices for these stocks. Moreover, these are stocks with high dividend yields - hence my contention that these are good defensive stocks.

Exelon Corporation (NYSE:EXC): EXC is currently trading around $35.30, up 1.50% from Wednesday's closing price. YTD, EXC has fallen more than 18%. EXC's performance this year does not inspire a great deal of confidence, but the stock has a dividend yield of 5.96%, which makes it an attractive hedge proposition.

EXC has bounced back after hitting a 52-week low of $34.54. The stock could face some resistance around $36. If it breaks through this level there is significant upside potential.

EXC has a P/E ratio of 15.09, which is below the industry average of 16.62. In the most recently reported quarter, EXC had reported net income of $522 million on an adjusted basis. CEO Christopher M. Crane said at the time of the release of second-quarter results that he is pleased with the results of the company's merger integration efforts and is confident of realizing value from the Exelon-Constellation merger.

Ameren Corp. (NYSE:AEE): Shares of the St. Louis, Missouri-based utility holding company are currently trading around $32.50, up nearly 0.75% from Wednesday's closing price. AEE currently has a dividend yield of 4.91%. YTD, AEE has fallen 1.6%.

AEE has a 52-week high of $35.30. AEE is currently trading above its 200-day moving average. The stock has faced some resistance around $32.75. If it breaks through this level, there is some upside potential. The MACD chart for AEE indicates that the recent bearish trend is now over.

AEE currently has a very high P/E ratio of 66.51. Last month, AEE raised its earnings guidance for the full year. The company now expects core earnings for the full year to be between $2.25 per share and $2.55 per share.

PPL Corporation (NYSE:PPL): Allentown, Pennsylvania-based PPL currently has a dividend yield of 4.99%. Shares of the utility holding company are currently trading around $28.80, up 0.10% from Wednesday's closing price. YTD, PPL is down nearly 2%.

PPL has traded sideways in the last few weeks. The stock has faced resistance at around $29.50. There could be some upside potential if the stock breaks through this level. PPL has a 52-week high of $30.27. The stock is currently trading above its 50-day and 200-day moving averages.

With a P/E ratio of 9.8, PPL is attractively valued currently. In the most recently reported quarter, PPL had earnings of $0.46 per share. Last month, PPL had also reaffirmed its 2012 earnings from ongoing operations forecast of $2.15 per share to $2.45 per share.

Dominion Resources Inc. (NYSE:D): Dominion is currently trading around $53, up nearly 0.5% from Wednesday's closing price. Dominion has a dividend yield of 3.98%. YTD, shares of the Richmond, Virginia-based company have been nearly flat.

Dominion has a 52-week high of $55.62. The stock has traded sideways in the last two months. Dominion shares have struggled to break through the $54 resistance level. The stock is currently trading above its 200-day moving average and is close to its 50-day moving average.

Dominion has a P/E ratio of 22.58, which is higher than the industry average. Dominion had reported operating earnings of $0.59 per share in the most recently reported quarter. For the full year, the company expects operating earnings to be between $3.10 per share and $3.35 per share.

American Electric Power Company Inc. (NYSE:AEP): The Columbus, Ohio-based utility holding company currently has a dividend yield of 4.31%. AEP shares are trading around $43.50 currently, up 0.10% from Wednesday's closing price. YTD, AEP shares have gained nearly 5.5%.

AEP shares are currently trading close to their 52-week high of $43.96. The stock has traded in a tight range in the past few weeks, but if it breaks through $43.96 level, there could be some upside potential. AEP is currently trading above its 50-day and 200-day moving averages.

AEP's P/E ratio of 10.59 is well below the industry average. The valuation, therefore, looks attractive at current level. AEP had reported operating earnings of $0.77 per share in the most recently reported quarter.

Source: Utilities With High Dividend Yields