Monday, June 13, 2011

Dividend Machine Xcel Energy Inc., symbol XEL for June 13, 2011

Income investors, we have returned to the concept of stocks for widows and orphans.  The economy is going nowhere.  We cannot buy bonds or certificates of deposit for income, as they pay nothing and cost way too much.  So we are back to investing as if we are widows and orphans.

Investments for widows and orphans are investments in blue chip stocks that pay big dividends.  In this period of market uncertainty, I am adding a utility to my dividend machine list.

This week, I suggest you look at Xcel Energy, Inc., symbol XEL.   Like Southern Companies and Scana, this utility pays a greater than four percent dividend yield.  XEL closed at $24.03 on Friday June 10, 2011, which makes it very affordable. 

XEL has increased the dividend every year for at least 5 years.  They earn $1.68 per share and pay out $1.04 per year.  If you own the XEL by June 21, 2011, you will receive a quarterly dividend of $.26 per share on July 20, 2011.

Nearly all utilities carry debt and XEL is no exception.  The D/E ratio of 1.19 is well within the industry standard.

I picked XEL to broaden the geographic diversification of the utilities we include in the income-producing portion of our investment portfolio.

Very Truly Yours,
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