Thursday, November 8, 2012

Questar STR Dividend Machine for 11/8/2012 Are utilities still a good income investment?

English: Natural gas burning
English: Natural gas burning (Photo credit: Wikipedia)

Questar symbol STR Dividend Machine for week of November 5, 2012
           

            Questar is a gas utility that serves the Rocky Mountains and Questar is the first dividend machine I found today.   The most recent trade was $19.37 which makes STR a very affordable dividend machine for investors.  STR also fulfills the needs of investors who want an energy play that concentrates on gas.

 

            Questar will pay a quarterly dividend of $.17 on December 10, 2012 if you own it by November 14, 2012; that is an annual yield of 3.51%.  Questar has raised the dividend every year for 32 years and sports a D/E ratio of 1.31 which is greater than 1 but within reason for a utility.

 

            You can review the dividend machine data including most recent earnings per share and dividend history in the table below. 

 

DIVIDEND MACHINE
11/5/2012
Questar
STR
Price when profiled
$19.37
Last 4 Qtrs Earnings
$2.81
Last 4 Qtrs Dividends
$0.67
Current Qtr Dividend
$0.17
Annualized Div Yield
3.51%
No. Years Div Increase
32
Debt/Equity ratio
1.31%

 

            As you know, my dividend machine project is based on very specific criteria that I stick with no matter what.  I invest in many but not all of the companies I profile.  I already own a lot of utilities, as do many income investors.  Because of the tax law changes that are looming on dividend income, investors who own dividend stocks in non-retirement accounts may have to think twice about this strategy.  For those who invest for income using qualified retirement plans, the tax changes may … I reinforce … may cause stock price reductions on utilities and in this we find bargains.    Please remember that trying to time any market is fools play.   However, I do like utilities for part of any income investing portfolio and moving into utilities that embrace the technology and energy sources that are considered safe and abundant may make Questar a good fit for those building the income producing portion of their portfolio. 

 

Very Truly Yours,

TheMoneyMadam
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