GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

The Best Performing Dividend Paying Utilities And Which Of Them Are Still Cheap

Utilities are often high dividend payers but they also have high debt amounts and their growth abilities are very limited.

Normally, you should not expect higher capital gains due to the slow growth and high investment costs.

It’s surprising that the best performing utilities gained 18 percent to 80 percent within the first six months of the year. In my view, it’s a shift to quality business models with higher yields and stable returns. Investors look for investment alternatives outside the bond sector and utilities are a place to be for the time being.

I created a small list of the 20 best performing utility dividend stocks and excluded all companies with a market capitalization below USD 300 million. They are definitely too risky and some of them have an extraordinary high return. Lower valuated companies dominating the top results. The average market capitalization amounts to 3.6 billion.

Despite the large price increase of the stocks, twelve of them still have a buy or better rating.

Here are the cheapest stocks in terms of foward P/E:

OGE Energy (OGE) has a market capitalization of $6.81 billion. The company employs 3,377 people, generates revenue of $3.671 billion and has a net income of $385.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.040 billion. The EBITDA margin is 28.35 percent (the operating margin is 18.44 percent and the net profit margin 10.49 percent). OGE shares gained 23.65 percent this year.

Financial Analysis: The total debt represents 33.05 percent of the company’s assets and the total debt in relation to the equity amounts to 118.51 percent. Due to the financial situation, a return on equity of 13.32 percent was realized. Twelve trailing months earnings per share reached a value of $1.72. Last fiscal year, the company paid $0.80 in the form of dividends to shareholders. Forward P/E: 8.82.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.97, the P/S ratio is 1.85 and the P/B ratio is finally 2.45. The dividend yield amounts to 2.44 percent and the beta ratio has a value of 0.72.

UGI Corp (UGI) has a market capitalization of $4.42 billion. The company employs 8,660 people, generates revenue of $6.519 billion and has a net income of $186.60 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $808.30 million. The EBITDA margin is 12.40 percent (the operating margin is 7.79 percent and the net profit margin 2.86 percent). UGI shares gained 20.41 percent this year.

Financial Analysis: The total debt represents 37.89 percent of the company’s assets and the total debt in relation to the equity amounts to 164.77 percent. Due to the financial situation, a return on equity of 9.47 percent was realized. Twelve trailing months earnings per share reached a value of $2.20. Last fiscal year, the company paid $1.06 in the form of dividends to shareholders. Forward P/E: 13.83.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.63, the P/S ratio is 0.68 and the P/B ratio is finally 1.96. The dividend yield amounts to 2.90 percent and the beta ratio has a value of 0.42.

Atlas Energy (ATLS) has a market capitalization of $2.38 billion. The company employs 832 people, generates revenue of $1.521 billion and has a net income of $-16.88 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $212.91 million. The EBITDA margin is 13.99 percent (the operating margin is 2.42 percent and the net profit margin -1.11 percent). ATLS shares gained 35.11 percent this year.

Financial Analysis: The total debt represents 33.51 percent of the company’s assets and the total debt in relation to the equity amounts to 330.64 percent. Due to the financial situation, a return on equity of -9.98 percent was realized. Twelve trailing months earnings per share reached a value of $-0.91. Last fiscal year, the company paid $1.03 in the form of dividends to shareholders. Forward P/E: 11.88.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 1.56 and the P/B ratio is finally 5.08. The dividend yield amounts to 2.69 percent and the beta ratio has a value of 2.93.

Take a closer look at the full list of the best performing dividend utility stocks. The average P/E ratio amounts to 26.85 and forward P/E ratio is 17.69. The dividend yield has a value of 3.59 percent. Price to book ratio is 2.29 and price to sales ratio 2.67. The operating margin amounts to 20.43 percent and the beta ratio is 0.76. Stocks from the list have an average debt to equity ratio of 1.31.

Related stock ticker symbols:

SMLP, NKA, BKH, EQT, ATLS, NVE, APU, SPH, MDU, ALE, OGE, WTR, CNP, ORA, UGI, STR, LG, OTTR, ITC, CPK

Selected Articles:

· 8 Utility Dividend Stocks With The Highest Float Short Ratio

· 20 Cheapest Utility Dividend Stocks

· Best Utility Dividend Stock Picks For 2013

· 20 Biggest Dividend Payers From The Utility Sector

*If you would like to receive more dividend stock ideas and the free Dividend Weekly, you should subscribe to my free e-mail list. Alternatively, you can follow me onFacebookor Twitter.Utility dividend stocks with highest performance year-to-date originally published at long-term-investments.blogspot.com.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend's Website


Rating: 1.0/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide