The price of natural gas is relatively very low, so consumers don't mind cranking up the heat. Now were are entering the winter season when consumption will increase. How about looking at natural gas utilities as possible investments, especially because of the great dividends. Seventeen of these stocks pay 4% or more.

Here are a few examples of high yielding natural gas and propane utilities and limited partnerships:

At the end of each trading week, Hillbent scans for the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our Market Condition Summary to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

According to Bespoke Investment Group, the companies on this list have incurred the biggest changes in their EPS estimates over the past month. We took the top/bottom 10 companies (excluding financials) on the list and provided our outlook on these firms based on their attractiveness from a valuation standpoint and the sales growth expectations embedded in their current stock price. The companies on this list with an attractive valuation and reasonable expectations for growing sales are the companies we believe are the most likely to outperform.

It is important to note that earnings are important but not sufficient for evaluating a firm’s ability to create wealth and the shortcomings of EPS alone, take a look at a recent article titled EPS Incresed…Company Underperformed? For a more comprehensive approach to valuation, we suggest you look at the following strategy of how The Applied Finance Group finds value.

If you want to try the stock trading technique called 'Buying Dividends,' which is the technique of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend, there are many stocks to choose from. This technique generally works only in bull markets.

When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks.

Gas is essential to keep people warm during the coldest months of the year and clearly gas companies operate on a cyclical basis. Although consumers need gas throughout the year, demand is understandably greater during the winter months. However, you would think that investors, having seen this cycle year after year, would understand the cyclical nature of the business and gas stocks would not run-up so much in anticipation of the winter spike in usage. At least this year, that pattern does not seem to apply, as over the last three months gas utility stocks have increased by 14%, while the S&P 500 declined more than three percent. The decline in energy prices might have something to do with this out-performance, since these are regulated industries and the fall in input prices boosts their bottom lines. Perhaps there is also something to be said for cold weather making people and investors have heating on their minds.

In a blog posted in mid-November (Gas Utilities Heating Up for the Winter), we made the case that a gas utility stock may make sense for certain portfolios. As they are generally defensive (with betas under 1.0), they can usually offer a good dividend and they are resistant to the slowdown in consumer spending. We did also mention that gas will be more in demand at this time of year, but did not honestly think that this would have a large positive effect on gas stocks.

I want to give a hat tip to TraderMark over at Fundmymutualfund.com for assembling this list. 2008 was a chaotic year, to say the least, and with indexes down huge on the year, there weren't many rays of light in the abyss known as the 2008 stock market.

The following though, is a list of some of best performing stocks for the year of 2008:

We started writing the Razor’s Edge blog about a year ago as a way to reach out to the investment community through our research. The dual purpose was to highlight some of the most timely and interesting stocks in our research coverage, but also to demonstrate that we have made our research platform specifically to meet the needs of busy but engaged investors, be they individual or institutional. The response has been overwhelmingly positive and we will continue to blog because of this reception. Now, for much of the past year, the stock market has been getting kicked in the teeth and investors would be hard pressed to find an investment strategy that performed anywhere near acceptable levels. However, we are starting to see the market regain a bit of stability over the last month, and the volatile swings are becoming less frequent and less violent in nature.

This year’s market has been dominated by fear and uncertainty rather than valuations, as we have seen quite a few high quality companies with strong fundamentals beaten down in this downturn. We believe we are seeing a calming in the market or at least a return to some sense of normalcy. This is not to say that there won’t continue to be volatility, specifically in certain sectors and industries. As the markets try to absorb the massive layoff numbers that seem to be hitting the wires each day and the potentially dismal retail returns for this holiday season, we still see opportunities. Over the last month, the broad market indexes have all slowed their collapse with the S&P 500 down 2.8%, the DJIA down 1.5%, and the Nasdaq down more, heavily dropping 4.6%. However, over the last month our blog’s undervalued recommendations are up 12.5% (by simple average from the date of the recommendation to close 12/10), while our overvalued calls are down 9.5% by the same method.

Last week the markets broke through yet another set of support levels to the lowest point in 11 years. Pundits, technical analysts and others kept getting more bearish on the markets and the economy. There were however several stocks which showed enough confidence in their financial situation that they decided to stick with their dividend payment plans. I view stocks that increase their dividends in this tough environment as defensive, recession proof corporations, who have survived many downturns, recessions and credit crisis. They view the current financial hiccup as only temporary in nature, which in turn shows the confidence in their business models.
The companies that increased their dividend payments to stockholders include:

Donaldson Company, Inc. (DCI) announced that its Board has approved a 5.00% increase in its quarterly dividend from $0.11 to $0.115 per common share. Donaldson Company is a dividend achiever which has increased its dividends for over thirteen years. The stock currently yields 1.80%.

With winter right around the corner, we thought it a perfect time to highlight some of the companies that are best positioned to take advantage of the cold months ahead. Utility stocks are generally thought of as boring but could be just the defensive play that your portfolio is clamoring for. For example, historically utilities pay a generous dividend and are less volatile (beta under 1.0) than the overall market. The coldest months of the year are coming up which means gas furnaces and hot water heaters will be working especially hard to keep American families comfortable. You could make the argument that this industry is somewhat shielded from the consumer spending slowdown because heating one’s house—for the vast majority of Americans—is not a luxury. Even the most financially burdened consumer is likely to make paying the gas bill a top priority.

So, using that logic, let’s take a look at one of the most undervalued gas utility stocks and then two of the most overvalued. We have included ratings history charts for each stock and the underlying research will be available for free on our website.

Sticking to basics

In a helter-skelter second quarter, the Dow Jones Utilities Average was one of the top-performing major indices, with an 8.7% return that trailed only the NYSE Energy Index, according to a July 1 report from Bloomberg.

Compared to key industry, style and broad-market indices—such as the NASDAQ Composite, the Russell 2,000, the S&P 500, the S&P SmallCap 600 and the Dow Jones Industrial Average, the utilities sector stood out not just for its 2008 return, but for its limited retreat in the face of a tough market threatening to reach full-out bear status.

Another down week for the stock market as it tumbled 1.2% and 3% on the S&P and NASDAQ respectively. Declines were broad-based as only the Healthcare sector rose over the past 5 days. The NASDAQ fell more sharply than the overall market, with the largest declines on Wednesday of last week.

The main catalysts remain surging oil prices, the struggling financial sector and concern over a weak economy. Overall the market has lost 14% YTD and the S&P 500 has lost nearly 20% since highs hit in October. We sense that the investor gloom index (if there were one) hit new highs last week. Unfortunately, we suspect things will likely get gloomier before getting better.

According to the Department of Energy's Energy Information Administration's release on January 8, "natural gas spot price averaged $7.17 per thousand cubic feet (mcf) in 2007, and is expected to average $7.78 per mcf in 2008, and $7.92 per mcf in 2009." Maybe it's time to take a closer look at natural gas, and propane utility stocks.

Amerigas Partners (APU) is a Pennsylvania-based retail propane distributor. The stock has a forward P/E of 14.29, a PEG of 3.78, and a yield of 6.8%.

"We think it'll be the best phone ... this year. It will kill the iPhone," Verizon (VZ) Wireless Chief Marketing Officer Mike Lanman said in an interview.

The Voyager, made by LG Electronics (LG) , beats the iPhone by offering faster wireless Web access. But to compete with the iPhone, which is only available to AT&T (T) subscribers, it has a large touch screen and full Web browser.

Yields are based on the annual dividend payments divided by the price per share. The following are listed in order of highest yield first. The second one on this list, Laclede Group (LG) is one of the oldest publicly traded companies, founded in 1857. In addition, it is one of the original twelve stocks in the Dow Jones Industrial Average.

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