Duke Energy Corp (DUK), The Southern Company (SO): Is It Time To Buy Utilities?

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Dividends is where it’s at for utilities: Duke Energy Corp (NYSE:DUK) has a long history of strong dividend performance, and its most recent payment was the 87th consecutive year it has paid a quarterly cash dividend. The Southern Company (NYSE:SO) raised its dividend for the 12th straight year. While Dominion boasted its 10th successive annual dividend hike, as it looks to target a payout ratio of between 65 and 70%. A discounted Utility ETF is a handy printing press for money!

Utility buyers will have good company. Warren Buffett has already fished in the utility sector with Berkshire Hathaway Inc. (NYSE:BRK.B)‘s acquisition of NV Energy, Inc. (NYSE:NVE). While overall acquisition activity has been high with Duke Energy Corp (NYSE:DUK) sucking up Progess Energy, while Exelon Corporation (NYSE:EXC) grabbed Constellation Energy Group, Inc. (NYSE:CEG).

Building a position

While Utilities are looking attractive for those buyers willing to buck opinion, it’s not a time to be making a lump sum investment. Spread the investment into months or quarters, and look to build a position over time. If March was when you took your initial investment, then now is a good time to add to this. The key advantage with utilities is the generous yield, which can be reinvested into more stocks or ETFs, helping to compound your return.

Declan Fallon has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources, Inc. (NYSE:D) and The Southern Company (NYSE:SO). Declan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Is It Time To Buy Utilities? originally appeared on Fool.com and is written by Declan Fallon.

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