Top yielding electric utility stocks are the subject of a post today at Stockerblog. Three utility stocks in particular are mentioned – none of which, unfortunately, are going to make it on to my active watchlist.
Here’s my quick take on the three utility stocks mentioned (the stars represent Dividendinvestor.com’s star ranking system – three stars are five years of consecutive dividend increases, four stars are ten, and five stars are 20):
UIL Holdings [[UIL]] (0 stars) – The shares of this Connecticut-based electric utility appear roughly fairly valued to somewhat undervalued here at about $23 and yielding 7.8%. This company isn’t much of a dividend raiser – its dividend has remained the same for years – and in fact was recently included on one research firm’s list of utilities most at risk for a dividend cut. I’m steering clear of this one.
TECO Energy [[TE]] (0 stars) – Trading at about $11 and yielding 7.1%, the shares of this Florida-based electric utility appear somewhat undervalued based on discounted cash flow analysis and long-term price trend, and perhaps slightly overvalued when compared to recent historical valuation ratios. TE’s dividend history isn’t distinguished – it appears to have cut its dividend by almost half back in 2003. Further, it’s also included on a list as one of the utilities most at risk for a dividend cut. I’m staying away.
Pinnacle West Capital [[PNW]] (0 stars) – The stock of this Arizona-based electric utility is currently trading at about $27 and yielding 7.9%. It appears roughly fairly valued to somewhat undervalued – the latter based on its long-term price trend and when compared to its recent historical valuation ratios. The company has gradually increased its dividend over the last 15 years, but has left it unchanged since 2006. PNW is mentioned in a recent article as being at risk of a dividend cut. That’s enough to have me looking elsewhere.