Wednesday, October 23, 2013

Dividends & Income - Consolidated Edison (ED) - 2013 Dividend Machine

In 2013 I am looking for dividends of at least four percent.  So many good dividend producing companies are priced high and paying barely over three percent.   If you can find a company that also provides in the money covered call options, you can boost a three percent yield into a four percent yield.

For those who want an easier way to four percent consider utilities.  Let's take a look at this idea and review my newest favorite utility.

UTILITIES for Dividends & Income

Bond prices and yields affect utilities.   They perform in concert.   When bond prices increase, the yield goes down; you already know that.    During periods of inflation, bond yields increase.  These increased yields compete with the yields that utility companies pay.   

For instance, why buy a utility which is a stock and could go up or down significantly in price when you could buy a five year bond with the same yield and you are pretty sure you are going to get your principle returned at maturity.  

Currently our economy is weak.   We have a lot of unemployment.   Bond prices are up and bond yields are down.  They are no competition for utilities.  This is why I am adding to a few positions.

CONSOLIDATED EDISON (ED) - A 2013 Dividend Machine

Consolidated Edison was a dividend machine in 2011 ( and again in 2012 (   It makes the grade for 2013.


This utility pays a yield of around 4.2%.   They have increased the dividend every year for more than 10 years.  Earnings of $3.42 per share per year clearly exceed the dividend pay out of $2.46 per share per year. Debt to Equity Ratio (D/E) is 1.042.   By all measure this is a dividend machine.  I added to my position today.     See the table below for a quick review of ED's dividend machine fundamentals.

Consider Consolidated Edison (ED) for the income producing portion of your portfolio.

The Money Madam
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