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  • Three Electric Utilities to Own, Three to Avoid [View article]
    Having owned various utility stocks for over 30 years, I would suggest only a very modest exposure to the sector. The stocks hardly grow, and dividends are reduced from time to time.

    As one example, I bought AEP in 1981 and still own the shares. In 1981 the dividend was $2.5/yr, but it was cut about 10 years ago, and today it is $1.64/yr. If you adjust for true inflation, the income from its dividend in terms of buying power is now roughly one-sixth of what it was when I bought the stock, 27 years ago!

    Moreover, if and when interest rates rise, utilities are likely to plunge. So buyer beware.
    Feb 04 07:41 am |Rating: +5 -2 |Link to Comment
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