Monday, January 10, 2011

Dividend Machine Scana Corp., SCG

Scana Corporation symbol SCG is a utility in South Carolina; I love Charleston but that is not why I like Scana. I like Scana because not only does it make a lot of money $2.87 per share but also it pays us $1.94 a share.

At the closing price on January 7, 2011 of $41.12, the yield is 4.69%. Scana is number eight of the fifty two dividend machines I will profile for your income investing portfolio.

They make a lot of money but they have enough to continue to reinvest in their business of delivering gas and electric to its customers. Scana has increased the dividend every year for at least 5 years at a 4.6% clip. Their D/E ratio is 1.35 a touch high but tolerable considering the industry. It is expensive to build and deliver energy.

As I suggested in my last post on dividend machines, you need to diversify your holdings among small companies as well as large, and among industries. Historically utilities have been an integral part of every income investor's cash flow strategy. You should not have all your money in utilities but you should have some. Consider Scana as a good dividend machine. Investigate other utilities. Later this week I will discuss some of the nuances of utilities to help you make better choices.

Create your cash flow strategy using dividend machines, bond interest, and covered calls then gradually invest to create enough income to quit working.

Very Truly Yours,