We posted Part 2 of our "Building A DIY Dividend Portfolio" series this morning, which highlighted our top-ranked dividend stocks in the Utilities sector (see summary table below).

As we highlighted in Part 2, we believe that patiently waiting for a low-risk entry point for a given stock will drastically improve your long-term investment results. Just because a stock has a high Parsimony composite rating, it doesn't necessarily mean that you should run out and purchase it that day. We scan the charts of our top-rated stocks daily looking for strong levels of support and resistance, which ultimately helps us determine a target "Buy Zone" for each stock.

Tactical Strategy for the DIY Dividend Portfolio

As a follow up to Part 2 (Part 2b, if you will), below are our target "Buy Zones" for each of these top-rated Utility stocks. We believe that the recent pullback in the broader equity

Fundamental analysis appears to be a sub-optimal valuation technique for investing in publicly-traded shares of closed-end funds ("CEF"). Key concepts of fundamental analysis such as "intrinsic value" and "earnings yield" plays a much smaller role for professional investors participating in this stock market segment. In fact, we believe that CEF share price valuation has more in common with underlying concepts of technical analysis.

Based on fundamental analysis, The Adams Express Company (ADX) should be a "buy" and Gabelli Utility Trust (GUT) should be a "sell", but "Mr. CEF Market" appears not to currently support that conclusion. (See analysis below)

Failure of Fundamental Analyses: We believe fundamental analysis fails to ascribe accurate share price value expectations for CEFs on two key fundamental concepts.

1. Intrinsic Value: This concept attempts to value a stock based upon alternate methods of enterprise valuation (managed assets in the case of investment companies), i.e., discounted cash flow,

The Southern Company (SO) has long been a staple in conservatively managed dividend and retirement portfolios. The company is comprised of 4 power generating units, Alabama Power, Georgia Power, Gulf Power, and Mississippi Power, all of which are typical regulated public utilities, based in the southeast US. In addition, Southern Company owns Southern Power, which is a merchant wholesale generator, and Southern Nuclear, which is the licensed operating arm for the 3 nuclear plants in Alabama and Georgia owned by the firm. Finally, Southern Company also owns SouthernLinc Wireless, and Southern Telecom, a fiber optic wholesaler based in the southeast.

The reason that SO has become a fixture stems from the firm's dependable financial performance over extended periods of time. Total shareholder returns over 5, 10, and 30 year periods have been 9.9%, 11.4%, and 16.3%, respectively. The dividend was increased by 3.7% in April, 2012 (from $0.4725/sh/q to $.49),

E.On Energy (EONGY.PK) is an equity most people have never heard of. E.On, what the heck is an E.On? Sounds like a space ship or something. Not quite. E.On energy is one of the world's largest companies, and despite being the 116th largest company in the world, according to the most recent Financial Times Global 500, you likely have never heard of them.

Seeking Alpha isn't helping. They have no information for E.On beyond the historical stock price chart. According to The Motley Fool, E.On's current market cap is $38.8 billion with a P/E of 5.91. E.On's annual report, which came out in March, is on the whole encouraging. For 2011, E.On was unprofitable, posting a close to 1.5 billion Euro loss. At first, this sounds terrible and a lot of investors appear scared off by this. However, sometimes it pays to go against the herd, and I see the

Do you consider a company's sales trends when comparing stocks? Because many companies earn a majority of their profits through revenue, a sales analysis is an important part of almost any company's story.

To illustrate, we ran a screen. We began by screening the utilities sector for stocks with strong upward momentum, trading within 5% of their 52-week highs.

Then to look deeper into their sales trends, we compared growth in revenue to growth in inventory over the last year. We screened for stocks with negative sales trends, with faster growth in inventory than revenue over the last year. Since inventory represents the portion of goods not yet sold, slower growth in revenue than inventory is considered a negative sign.

To screen for declining liquidity, we also only focused on those companies with inventory increasing as a percent of current assets.

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Do you think these companies are

We Are DIY Investors...Just Like You

By way of background, Parsimony Investment Research is a group of Do-It-Yourself investors that whole-heartedly believe that individuals can and should educate themselves and manage their own money. That is, of course, if you are willing to dedicate the time and patience necessary to do so. In today's low interest rate environment, paying even modest fees to a financial advisor can significantly eat into your profits. At the end of the day, it's YOUR money and you alone are the best shepherd of your capital.

We started Parsimony to share our experiences, strategies and research with fellow DIY investors. At the end of the day, we are all in the same boat…so let's set sail and preserve and grow our wealth together!

Building A DIY Dividend Portfolio

Over the course of the next few weeks, we are going to highlight our top-ranked dividend stocks

2012 Annual Meeting of Shareholders Conference Call

May 23, 2012 10:00 am ET

Executives

John W. Gibson – Chairman and Chief Executive Officer

Eric Grimshaw – Vice President, Associate General Counsel and Corporate Secretary

David J. Tippeconnic – Chief Executive Officer, Arrow-Magnolia International, Inc.

Julie H. Edwards – Former Chief Financial Officer, Frontier Oil Corporation Southern Union Company

Jim W. Mogg – Retired Chairman DCP Midstream GP, L.L.C.

Presentation

John W. Gibson

I’m John Gibson, Chairman of the Board and Chief Executive Officer of ONEOK, Inc. It’s my pleasure today to welcome you to the ONEOK 2012 annual meeting of shareholders. In accordance with the notice of the meeting, I now call this meeting to order. It is our intention to conduct today’s meeting according to the agenda and the rules and procedures you received as you entered the room.

Please note that following adjournment of the

Despite the year-to-date underperformance to the broader market, there are significant benefits to owning utilities in your portfolio. I think investors should stick with utilities due to their strong dividend yields and the potential for outperformance in a "risk-off" market. The markets experienced a strong rally in the first quarter of 2012, but since the beginning of April the broader market is starting to show real signs of weakness. The S&P 500 as measured by the SPY is off 6.7% since its April 2nd peak. The markets have showed signs of fatigue after a strong run and renewed fears from Europe. The safety and strong dividend yields should provide investors with a strong sector to hideout in during a prolonged sell-off.

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Investors who have flocked to dividend-yielding equities have been treated to underperformance in early 2012. As the 10-year Treasury remains at a paltry 2.0%, investors have

The Limits Of Defensive Stock Allocation

In a Seeking Alpha article published last year ("Lessons From Thursday's Market Meltdown"), we noted that defensive stocks don't protect against market risk. On Monday, an item in the Lex column ("Safety on Wall Street") made a similar point, albeit more colorfully. After pointing out the benefits of investing in US Utilities now -- that they lack exposure to the problems in Europe, and, as dividend-payers, are positioned to attract investor interest if central banks keep discount rates low in response to a European crisis -- Lex noted the potential downsides:

Remember how little relative outperformance can mean when things get ugly, though: in real money utilities dropped 46 per cent in the last crisis. Unless you have a stock-only mandate, sector allocation during a collapsing market is like deciding whether to use the salad fork or the dinner fork to stab yourself in

Every month I run a screen of David Fish's excellent Dividend Champions and Contenders searching for undervalued companies. If a new name pops up, I will usually take a longer look to see if there is any real value there. Needless to say I was surprise this month when two utilities barely made it onto the list. After all, I have read several times in recent months that utilities are supposedly overbought and bad investment material. The two utilities in question this month are PPL and NextEra Energy (NEE). For this article I will take a hard look at these two and see what I come up with. As always, my focus will be on the ability to make a profit and generate cash.

Background

From PPL's 2011 Annual Report:

PPL is an energy and utility holding company with headquarters in Allentown, Pennsylvania. Through subsidiaries, PPL generates electricity from power

The price of natural gas is hitting all-time lows recently after the use of fracking has allowed energy companies with a stake in natural gas such as Apache (APA), EOG Resources (EOG), and Exxon Mobil (XOM) to acquire greater volumes of natural gas with less cost. Fracking is a method that releases gases from shale rocks through hydraulic fracturing. The amount of natural gas reserves in the U.S. and worldwide are seemingly limitless now thanks to these somewhat recent technological advances.

The chart below shows the increasing amounts of natural gas reserves in the U.S. over a 30 year span, it can be found here.

With the price of energy declining rapidly, partially due to this fall natural gas prices and due to a milder winter where should investors look? Fracking involves pressuring thousands and thousands of gallons of water in order to extract the natural gas. After the water

Recent stock market volatility has pressed some investors to seek refuge in proven safe havens among traditional income-producing stocks. The ongoing uncertainty in the markets amid renewed concerns about the sustainability of the economic recovery is likely to last for quite some time. This suggests that some low-beta utility stocks could benefit from investors' fleeing high-risk cyclical equities. Electric utility stocks offer security and attractive dividend yields at levels of risk well below that of the broader market. For investors looking for a near-term shelter among equities, with a goal to earn some meaningful income, here are five dividend stocks in the electric utility sector yielding 5% or more. Most of these stocks have not been fashionable with guru investors for quite some time.

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Pepco (POM) is a $4.2 billion utility company supplying electricity and natural gas to customers in mid Atlantic region and

We have held a long position in Brookfield Infrastructure Partners (BIP) since the beginning of 2011 and we have been pleased with the results of the company during this time. We believe that because of the complex nature of BIP's infrastructure assets, investors may not necessarily have the ability to understand this company. We believe that this partly explains why only five brokerage analysts cover the stock.

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On the other hand, Brookfield's unique, hard-to-duplicate infrastructure assets provide them the ability to generate cash flows from operations and to pay out a sizable proportion of its income to partnership unit holders (BIP is a publicly traded limited partnership and one buys "partnership units" of BIP rather than common shares). We also believe that continued political uncertainty, such as the recent electoral victory of the Socialist party in the French Presidential Race, the continued instability in Greece and

These days, investors are treated to a sea of red by U.S. equities on an almost daily basis. Combine some weak U.S. economic data points with concerns about how hard China's economic landing will be along with the always present doubts that the euro common currency will survive and it's easy to see why investors have shunned risk in a big way.

While the risk off environment that has been seen since March stands in stark contrast to the ebullient, risk on days of January and February, there are places to turn. Investors just need to know where to look that. Keep in mind that 2011 was a risk off year that sent investors scurrying into three sectors: Consumer staples, health care and utilities.

That trend is once again at play. High-beta sector funds such as the Energy Select Sector SPDR (XLE) and Financial Select Sector SPDR (XLF) have been

In today's low interest rate environment, utility stocks offer investors a reasonable alternative to bonds. Utility stocks tend to be low growth, but stable equities that attract investors primarily looking for above-average dividend income. However, like all low growth vehicles, it is especially important to focus on valuation when looking at utilities as an investment option. Of the five western utility stocks covered in this article, only Hawaiian Electric (HE) appears to be valued at the high end of its historical valuation, but not excessively. Sempra Energy (SRE) is an example of a high historical valuation, but compensates potential investors based on expectations by offering faster growth than the other four. The remaining three look attractive based on earnings expectations.

Five Reasonably Valued Western Utility Stocks

The following table summarizes five western utility companies that appear to be reasonably valued, and lists them in order of dividend yield highest to

2012 Annual Shareholder Meeting

May 17, 2012, 11:00 a.m. ET

Executives

Charles Chandler – Director, Westar Board

Mark Ruelle – CEO

Analysts

Unidentified Analyst

Presentation

Charles Chandler

Good morning. If I could ask everybody to take their seat. It’s kind of tough today to come in from outside. It’s nice out there, so it just makes you want to stay. Well, I’m Charley Chandler and I’m the Chairman of the Westar Energy board. On behalf of the directors, welcome to the 2012 annual meeting of the shareholders of Westar Energy. We appreciate both your investment and your interest by joining us here at the meeting.

With me on the stage is Mark Ruelle, our President and Chief Executive Officer, and also the only member of management who also serves as a member of the board. I’d also like to introduce the other members of the board,

Q1 2012 Earnings Call

May 17, 2012 3:30 AM ET

Executives

Chang-Keun Shin – VP, Treasury Department

Cecilia Oh – Senior Manager, IR

Presentation

Operator

[Foreign Language – Korean]

[Interpreted]

Good morning and good evening. First of all, thank you all for joining this conference call, and now we will begin the conference of the fiscal year 2012 first quarter earnings results by KEPCO. This conference will start with a presentation, followed by a brief Q&A session. (Operator instructions)

Now we shall commence the presentation on the fiscal year 2012 first quarter earnings results by KEPCO.

Cecilia Oh

[Foreign Language – Korean]

[Interpreted]

Good afternoon. This is the Cecilia Oh, senior manager of KEPCO’s IR team. On behalf of KEPCO, I would like to thank you all for participating in today’s conference call.

[Foreign Language – Korean]

[Interpreted] I will begin with a brief presentation

Do you consider yourself a value investor, always looking for underestimated and potentially undervalued names? For ideas on how to start your own value search, we ran a screen.

We began by screening the utilities sector for stocks with strong upward momentum, trading above their 20-day, 50-day, and 200-day moving averages.

We then screened for those that also appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham.

It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

Interactive Chart: Press Play to compare changes in analyst ratings over the last

As many of my readers and followers have learned, I am a big fan of preferred stocks and the ability of preferred stocks to accomplish income/return goals of investors.

As I have learned, many of my readers and followers are not fans of preferred stocks which trade at premiums to par - as the yield to call can be less (sometimes significantly less) than the current yield of the preferred stock. I have also learned that many investors like utilities due to their (mostly) stable nature and cash generating - and paying - ability.

I think I have a win-win solution: A utility preferred that trades at/near par. Enter Southern California Edison (EIX) Series F preferred stock.

Here are the details: