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Jonathan Wolfe
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I have been investing for over 13 years now, mostly specializing in Dividend Stocks. I have done extensive research of dividend stocks in the market and I like to share my thoughts and ideas with the public.
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Dividend Income Stocks
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Dividend Income Stocks
  • High Yield Utility Stocks (Electric Sector) 0 comments
    Feb 14, 2012 5:12 AM | about stocks: EXC, DUK, SO, D, PPL, DUK, FE, TE

    A strong dividend play is investing in high yield utility stocks. Most investors are aware of this strategy, much more than the investments in Business Development Companies or Real Estate Investment Trusts, which I have written articles on here in the past. Utility stocks are usually considered safe dividend stocks, due to the constant demand for their services (electricity, water, gas, etc). This article is going to focus on high yield utility stocks in the electric sector. I am going to even focus even deeper and talk about electric companies with generation and distribution pieces.

      Q3 (Sep '11) Q4 (Dec '11)

    2011

    EXC -Exelon      
    Net profit margin  

    14.26%

    13.01%

    Operating margin  

    24.98%

    23.35%

    EBITD margin    

    30.31%

    Return on average assets  

    4.45%

    4.65%

    Return on average equity  

    16.91%

    17.86%

    Employees  

    19,214

     
    P/E Ratio    

    10.67

    Dividend Yield %    

    5.24%

           
    DUK - Duke Corporation      
    Net profit margin

    11.83%

     

    9.25%

    Operating margin

    19.35%

     

    16.17%

    EBITD margin    

    28.69%

    Return on average assets

    3.12%

     

    2.27%

    Return on average equity

    8.33%

     

    5.95%

    Employees

    18,440

       
    P/E Ratio    

    15.52

    Dividend Yield %    

    4.66%

           
    SO - Southern Company      
    Net profit margin  

    7.49%

    12.84%

    Operating margin  

    15.94%

    23.96%

    EBITD margin    

    33.69%

    Return on average assets      
    Return on average equity      
    Employees  

    25,940

     
    P/E Ratio    

    17.26

    Dividend Yield %    

    4.23%

           
    D - Dominion Resources      
    Net profit margin

    10.41%

     

    19.61%

    Operating margin

    21.90%

     

    37.51%

    EBITD margin    

    44.45%

    Return on average assets

    3.63%

     

    6.98%

    Return on average equity

    13.49%

     

    25.56%

    Employees

    15,800

       
    P/E Ratio    

    19.03

    Dividend Yield %    

    4.26%

           
    TE - Teco Energy      
    Net profit margin  

    7.10%

    8.16%

    Operating margin  

    17.37%

    18.59%

    EBITD margin    

    28.30%

    Return on average assets  

    2.92%

    3.74%

    Return on average equity  

    9.42%

    12.29%

    Employees  

    4,233

     
    P/E Ratio    

    14.12

    Dividend Yield %    

    4.94%

           
    PPL - PPL Corporation      
    Net profit margin

    14.39%

    9.60%

    11.44%

    Operating margin

    25.13%

    20.37%

    23.71%

    EBITD margin    

    33.42%

    Return on average assets

    4.42%

    3.89%

    3.86%

    Return on average equity

    16.49%

    14.88%

    15.17%

    Employees

    13,809

       
    P/E Ratio    

    10.85

    Dividend Yield %    

    5.05%

           
    PGN - Progress Energy      
    Net profit margin

    10.67%

     

    8.51%

    Operating margin

    25.12%

     

    20.16%

    EBITD margin    

    29.19%

    Return on average assets

    3.52%

     

    2.70%

    Return on average equity

    11.58%

     

    8.83%

    Employees

    11,000

       
    P/E Ratio    

    20.61

    Dividend Yield %    

    4.55%

           
    FE - First Energy Corp      
    Net profit margin

    10.79%

     

    5.70%

    Operating margin

    21.66%

     

    13.53%

    EBITD margin    

    19.12%

    Return on average assets

    4.33%

     

    2.20%

    Return on average equity

    15.74%

     

    9.17%

    Employees

    13,330

       
    P/E Ratio    

    17.75

    Dividend Yield %    

    5.16%

    Exelon - EXC is the largest power producer in the United States. Not sure if its merger issues or what, that has the stock stale at about 40 dollars a share. EXC has extremely positive numbers with over a 5% dividend yield and a PE ratio of just over 10. The other numbers above show a positive trend and larger profit margins than most over utilities listed.

    Duke Energy - DUK is approaching a price high they haven't seen since late in 2006. The stock is approaching 22 dollars a share. DUK has a very strong dividend yield of 4.66% and a PE of 15.52. DUK is also showing positive growth in net profit margin and operating margin, but not the same margins that Exelon is showing.

    Southern Company - SO has just came off of an all-time high and their stock is sitting just below 45 dollars a share. SO continues to show strong net profit and operating margins as well as increasing dividend payouts. SO yields 4.23% with a PE of just over 17.

    Dominion Resources - D just like Southern Company is coming off of an all-time high, and their stock is sitting just below 50 dollars a share. D has shown some of the strongest margins over the past couple of years, but their margins have slipped the past couple quarters. D yields the same as SO, with a 4.23% yield and a slightly higher PE of just over 19.

    TECO Energy - TE, is the smallest company I have listed here. I have included TE here due to their high dividend yield, 4.99% and their PE of 14. But buyer beware as they just missed earnings for the 4th quarter, with lower revenues. However, they did increase the dividend once again, so keep an eye on TECO.

    PPL Corporation - PPL beat 4th quarter earnings estimates by 8 cents a share. PPL like TECO decided to raise their dividend 1 cent per quarter to 36 cents a quarter. PPL has a 5.06% yield and a PE of 10.85.

    Progress Energy - PGN sits in the same mold as DUK, SO, and D with its stock at an all-time high. PGN has a 4.54% yield and a PE of over 20.

    First Energy - FE has been a stock laying around 40-42 dollars a share for quite some time. FE has a PE of just under 18, and a yield of 5.16%.

    I could have written pages on each of these companies and reasons of why and why not to buy these stocks. I want to make this as simple as I could for everyone reading this.

    Read the rest of this article at dividendincomestocks.com/high-yield-util.../ or the homepage dividendincomestocks.com/

    Disclosure: I am long PPL.

    Additional disclosure: I also own DUK, but plan on selling that within the next 72 hours. I also plan on initiating a position in EXC during that time. I also work for PPL, but no information I have given is insider information, all information is available via their quarterly reports which are published on the web. I also do not plan on buying or selling any PPL stock within the next 72 hours.

    Stocks: EXC, DUK, SO, D, PPL, DUK, FE, TE
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