The 25 Highest-Yielding Utilities Stocks
Dividend investing is popular again. Investors have taken to heart Jeremy Siegel's studies, which show that higher-yielding stocks tend to offer greater returns over time than low- or no-yield stocks.
The highest dividend yields can be very tantalizing. As long as a stock yielding 15% doesn't lose value, you'll make 15% in one year! In more cases than not, however, an astronomical yield is a bad sign for a stock. Since dividend yields and stock prices move in opposite directions, a high yield usually means that investors have begun to worry about the business, and driven down its stock price.
Dividends are not guaranteed; you need to make sure that a business is generating enough cash to pay its dividend, or your investment could be disastrous.
I ran a screen for the highest-yielding utilities stocks and the only limitations I set are I'm only considering utilities and they must have a market cap greater than $300 million.
Here are the top 25 highest-yielding utilities the screen produced:
Company | Market Cap (in millions) | Dividend Yield | |
|---|---|---|---|
1 | Veolia Environnement (NYS: VE) | $5,942 | 13.8% |
2 | Ferrellgas Partners LP (NYS: FGP) | $1,582 | 9.6% |
3 | Atlantic Power (NYS: AT) | $1,482 | 8.6% |
4 | CPFL Energia S.A. (NYS: CPL) | $12,676 | 7.5% |
5 | Suburban Propane Partners LP (NYS: SPH) | $1,675 | 7.2% |
6 | AmeriGas Partners LP | $2,512 | 6.7% |
7 | Huaneng Power International | $9,041 | 6.5% |
8 | Centrais Electricas Brasileiras S.A. | $18,987 | 6.4% |
9 | Star Gas Partners, L.P. | $306 | 6.4% |
10 | Spectra Energy Partners, LP | $2,972 | 6.1% |
11 | National Grid | $33,734 | 6.0% |
12 | Cia Energetica de Minas Gerais | $10,764 | 5.6% |
13 | TransAlta | $4,578 | 5.6% |
14 | Pepco Holdings | $4,426 | 5.5% |
15 | Otter Tail | $776 | 5.5% |
16 | Brookfield Infrastructure Partners L.P. | $3,437 | 5.4% |
17 | Integrys Energy Group | $3,992 | 5.3% |
18 | UIL Holdings | $1,736 | 5.0% |
19 | Unitil | $302 | 5.0% |
20 | Ameren | $7,832 | 5.0% |
21 | FirstEnergy | $18,724 | 4.9% |
22 | Vectren | $2,345 | 4.9% |
23 | Exelon | $28,894 | 4.8% |
24 | PPL | $16,811 | 4.8% |
25 | Duke Energy | $27,801 | 4.8% |
Source: S&P Capital IQ.
These stocks are a good place to start your research, but they're not formal recommendations. Remember, their seemingly irresistible yields could be ticking time bombs, so do your own due diligence. Also, make sure you diversify your picks across various sectors. As investors relearn every decade or so, you never want to put all your eggs in one basket -- no matter how tempting the dividends are.
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At the time thisarticle was published Dan Dzombak owns shares of Brookfield Infrastructure Partners and National Grid, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Brookfield Infrastructure Partners. Motley Fool newsletter services have recommended buying shares of Otter Tail, Veolia Environnement, Brookfield Infrastructure Partners, Exelon, and National Grid, as well as writing a covered strangle position in Exelon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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