8×8, Inc. (EGHT) and More: These Utilities Hold Promise – and Some Hefty Dividends, Too

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. FirstEnergy Corp. (NYSE:FE) shed 2%, challenged by its coal and nuclear operations in an environment of low-price gas. Its gross margins have shrunk in recent years, and its presence in the path of Hurricane Sandy didn’t help, either. Still, patient and confident shareholders can collect a 5.4% dividend yield from the company. A possible subsidy for nuclear energy, seen by many as “clean,” will help.

Level 3 Communications, Inc. (NYSE:LVLT), long burdened with a mountain of debt, shrank by 3% over the past year. It’s expanding its services around the world, for example by boosting its video broadcasting in Latin America. Many are avoiding the stock, though, not liking its falling free cash flow or lack of a dividend. It got a nod from the folks at Pivotal last month, who like its increased bookings and project a return to positive free cash flow in 2013. The company’s fourth-quarter earnings disappointed some, however, as shares took a sharp hit. Management cited rising costs (including health-care expenses) and effects of Hurricane Sandy as some recent issues.

CenturyLink, Inc. (NYSE:CTL) has been growing steadily, and recently offered a hefty dividend yield of about 9% — but just a few days ago it announced a 25% dividend cut. The board has authorized a $2 billion share buyback, though, that can benefit shareholders. The company sports some solid free cash flow growth and has been making promising acquisitions, but its share count also has been growing significantly and its earnings are negative.

The big picture
Demand for utilities isn’t going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies — and make investing in and profiting from it that much easier.

The article These Utilities Hold Promise – and Some Hefty Dividends, Too originally appeared on Fool.com and is written by Selena Maranjian.

Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned, and neither does The Motley Fool.

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