I
am constantly looking for ideas about income investing and analysis of
stocks. Utilities are always on my
radar.
Today I reviewed an article
published in Seeking Alpha that was an extensive review of electric
utilities.
The article’s author,
Jonathan Bluhm, did a lot of work narrowing down his choices to five electric
utility stocks.
Five Electric Utilities:
I
applied my Dividend Machine Strategy to these five stocks to see how they stack
up. The table of my analysis is
presented below.
Once
you read his article (click
here for the link) you will see that he and I came to different
conclusions.
Two Dividend
Machines:
I
immediately eliminated EIX because it does not earn as much as it pays out and
the yield is less than my required three percent. ETR has not increased the dividend every
year as is required to be a Dividend Machine and DTE has a short, five year
history of dividend increases. When I
have the choice, I prefer a longer history of dividend increases.
That
leaves XEL Energy, symbol XEL and Consolidated Edison, symbol ED. I think that if you are going to buy one of
these stocks it would be XEL simply on the basis of the dividend growth
rate. Over the past ten years, XEL has
increased their dividend over four percent per year whereas ED has increased
the dividend only .9 percent per year.
Consider
these two companies, which are already in one or more of my Dividend Machine
Portfolios for the income producing portion of your portfolio.
The Money Madam
