Investors can look to utilities for solid profits. Though the sector has not been able to match the highs of others or even its own former glory, there are steady increases to be found in utility companies. Utilities have shown especially good promise since the beginning of 2013, reaching a 5 year high at the end of Q1. The dividends for utilities exceed those of other sectors and give stable and profitable returns to investors. Here are a few of the more worthy companies to choose from.
The Southern Company (NYSE:SO)
Southern Company provides electric services in four Southeastern states through its traditional operating companies: Alabama Power, Georgia Power, Gulf Power and Mississippi Power. The company has increased its dividends over the years, and The Southern Company (NYSE:SO) recently announced it will increase its quarterly dividend to $0.5075 cents per share. This makes its annual dividend $2.03 per share.
Is The Dividend Safe?
The Southern Company (NYSE:SO) is a safe pick with high dividends and low volatility. The company has shown smart management and strong financials to back its returns for investors. During Q1, The Southern Company (NYSE:SO) has seen positive signs of economic growth in the Southeast. With the improving economic environment, its housing-related manufacturing segments are starting to strengthen, and its economic development pipeline has been healthy as well.
As a result, its first quarter revenue of $3.9 billion represents an increase of 8.1%. Its kilowatt-hour sales increased 2.3% in retail customers and commercial energy, and residential sales increased 1.2% and 8.3%, respectively. Its payout ratio of 72.8% is manageable. Southern looks like a safe pick with a price to cash flow ratio of 7.6.
Duke Energy (NYSE:DUK) Corporation
Duke Energy Corporation provides services to over 4 million customers. Over the years, the company has been consistently paying increasing dividend–in fact, over the last five years it has been able to increase its dividends by 10.87%. At the moment, Duke offers a quarterly dividend of $0.765 cents per share.
Is The Dividend Safe?
Duke has become the largest regulated utility in the U.S. after its merger with Progress Energy. Duke Energy is now focusing on achieving its target of 5% to 7% cost synergies. The company is seeking to expand its size by acquisitions. Recently, it acquired two commercial solar power projects from project developer Solar World. The company is also working on major construction projects, which will provide increased diversity to its generation mix for decades to come.