8 Reliable, High-Yield Preferred Utility Stocks

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Includes: BGE.PB, DTE, DUK, HE, LNT, NEE, SO
by: Vatalyst

I looked for the largest dividend yields among utility preferred stocks traded on U.S. markets to check for dividend reliability and investment profitability in trust units or shares.

BGE Capital Trust II, 6.20% Trust Preferred Securities (BGE.PB): BGE Capital Trust is a subsidiary of Baltimore Gas & Electric Company, a utility which provides gas and electricity to Baltimore and central Maryland. It has achieved positive (yet not high) figures over the last three years, with an ROE of 8.1%. The preferred shares are a decent bet, at over 6% yield.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

BGE Capital Trust II, 6.20% Trust Pfd

BGE.PB

25.19

25.26

25.14

25.14

-0.11

-0.44

8,098

25.84

24.21

0.39

6.17

DTE Energy Trust I, 7.80% Trust Preferred Securities (DTE.PA): This energy company has good fundamentals and solid expectations of growth. Its net income (about $630 million) and its 10% return on equity suggest reliability in the underlying business. Shareholders can enjoy a strong 7.22% dividend yield with minimal concern given cash flows of $1.8 billion. Thus, in my opinion DTE is a good buy.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

DTE Energy Trust I, 7.80% Pfd

DTE.PA

27.23

27.23

26.87

27.00

-0.23

-0.84

5,374

27.62

22.99

0.49

7.22

FPC Capital I, 7.10% QUIPS Quarterly Income Preferred Securities, Series A ((FPC.PA)): Florida Progress Corporation (PGN) is an electricity company with $10 billion revenue and a 20.16% operating margin. It is a reliable dividend payer given the company's underlying metrics. Its 6.89% dividend yield is supported by 2.16 billion in operating cash flow and $52 million in cash on hand.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

FPC Capital I, 7.10% QUIPS Quarterly Income Pfd, Series A

FPC.PA

25.70

25.77

25.68

25.77

0.04

0.16

9,379

25.01

26.15

0.44

6.89

Georgia Power Co., 6 1/8% Series Class A Preferred Stock, Non-Cumulative (GPE.PA): As a part of Southern Company (NYSE:SO), Georgia Power (GPE) is a very solid energy company. Further dividend payments are being guaranteed by its $2 billion (net income) and equivalent cash flows. Southern, its parent, has $4.96 billion in cash flows and $443 million in cash on its books to support its subsidary's preferred dividend payments.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

Georgia Power Co., 6 1/8% Series Class A Pfd, Non-Cumul

GPE.PA

26.63

26.73

26.63

26.67

0.16

0.60

4,580

20.40

28.23

0.38

5.74

HECO Capital Trust III, 6.50% QUIPS Series 2004 Pfd (HE.PU): HE is a Hawaii-based holding company which operates in both the electric uility and bank sectors. Its net income is over $100 million, and is expected to grow at a 0.9% rate. Being strictly linked to its state (it is one of Hawaii’s oldest and largest companies), it is not likely to miss a payment, which is consistent with its history. 10% of HE's market cap is in cash, with $266 million on its balance sheet.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

HECO Capital Trust III, 6.50% QUIPS Series 2004 Pfd

HE.PU

25.42

25.42

25.42

25.42

-0.13

-0.51%

240

18.56

26.29

0.41

6.39

Interstate Power & Light, 8.375% Series B Cumul Preferred Stock (IPL.PB): IPL is part of Alliant Energy Corporation (NYSE:LNT), and provides energy to Iowa and southern Minnesota. Given its $0.52 per share dividend, this is a good buy, and being backed by Alliant Energy and its $970 million in cash flows, it can be considered a safe investment too.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

Interstate Power & Light, 8.375% Series B Cumul Pfd

IPL.PB

28.24

28.25

28.03

28.05

-0.20

-0.71

8,774

30.00

25.64

0.52

7.46

Alabama Power Co., 5.83% Class A Cumulative Preferred Stock (ALP.PO): Alabama Power is another Southern Company (SO) subsidiary. However, its dividends are slightly below average. This little difference between it and its sister company does not affect my opinion about the company: It can be a good investment given Southern's $5 billion in cash flows.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

Alabama Power Co., 5.83% Class A Cumul Pfd

ALP.PO

26.16

26.25

25.98

26.25

0.13

0.49

1,105

26.72

24.42

0.36

5.55

FPL Group Capital Trust I, 5 7/8% Preferred Trust Securities (NEE.PC): FPL Group is a subsidiary of NextEra Energy, Inc. (NYSE:NEE). NextEra Energy has always paid its dividends, and has $300 million in cash on its books in addition to nearly $5 billion in cash flows to supports its subsidiary's preferred shares. Analysts’ advice is to buy this stock, and I cannot avoid giving the same suggestion for the FPL Capital Trust I units. These units are trading above par, and so investors can expect a safe 5.5% return once the yield is adjusted.

Symbol

Open

High

Low

Close

Net Chg

%Chg

Vol

52 Week High

52 Week Low

Div

Yield

FPL Group Capital Trust I, 5 7/8% Preferred Trust Securities

NEE.PC

25.83

25.97

25.79

25.96

0.15

0.58

12,648

26.06

24.17

0.37

5.66

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.