The following utilities are offering a very high forward dividend yield, one that is 50% higher than the monthly spot rate on 10-Year high-quality market corporate bonds. The forward dividend yield is according to the share price at close Friday. The HQM corporate bonds are securities representing the corporate loan issued by companies that are triple-A, double-A and single-A rated.
I screened the utilities sector because analysts are seeing most of the independent power producers hit expectations on growth within the following 12 months. A forward dividend yield -- as defined above -- also reduces the risk of bumping into an overpriced stock.
Dividend investors may want to consider the following utilities.
Spark Energy Inc. (SPKE, Financial) closed at $8.25 per share on Friday. After a 44% loss for the 52 weeks through Sept. 28, the forward dividend yield went up to 9.12%. The stock has a market capitalization of about $287.75 million, a price-book ratio of 11.75 versus an industry median of 1.52 and an EV-to-Ebitda ratio of 3.46 versus an industry median of 10.53.
The share price is below the 200-, 100- and 50-day simple moving average lines. The 52-week range is $7.93 to $15.30.
Spark Energy Inc. is an electricity and natural gas retail distributor to residential, commercial and industrial customers in the U.S.
GuruFocus assigned it a financial strength rating of 6 out of 10 and a profitability & growth rating of 7 out of 10.
During the second quarter of 2018, Hotchkis & Wiley started a position purchasing 362,041 shares. Chuck Royce has increased his holding by 96.65% to 1,585 shares.
The recommendation rating is 1.7 out of 5 and the average target price is $13 per share.
Pattern Energy Group Inc. (PEGI, Financial) closed at $19.87 per share on Friday. For the 52 weeks through Sept. 28, the share price declined 18%, and the forward dividend yield went up to 8.5%. The stock has a market capitalization of about $2 billion, a price-book ratio of 1.66 versus an industry median of 1.34, a price-earnings ratio of 16.02 versus an industry median of 16.09 and a price-sales ratio of 4.22 versus an industry median of 2.06.
The share price is slightly above the 200-, 100- and 50-day simple moving average lines. The share price at close Sept. 28 is a few dollars off the 52-week low of $16.58 and 25.5% from the 52-week high of $24.94.
Pattern Energy Group Inc. is an independent power company. Pattern Energy owns and operates various power projects in North America and Chile. The company sells electricity and renewable energy credits to local markets.
GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability & growth rating of 7 out of 10.
During the second quarter of 2018, Steven Cohen started a position purchasing 180,745 shares. Pioneer Investments has reduced its holding by 4.65% to 192,236 shares. Jim Simons sold out.
The recommendation rating is 2.2 out of 5 and the average target price is $22.08 per share.
TerraForm Power Inc. (TERP, Financial) closed at $11.55 per share on Friday. After a 12% loss for the 52 weeks through Sept. 28, the forward dividend yield went up to 6.6%. The stock has a market capitalization of $2.4 billion, a price-book ratio of 1.1 versus an industry median of 1.34, a price-sales ratio of 2.50 versus an industry median of 2.06 and a forward price-earnings ratio of 20.08 versus an industry median of 19.16.
The share price is a little bit above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $9.90 to $14.20 per share.
TerraForm Power Inc. owns and operates clean power generation assets. The portfolio of the company includes solar and wind projects, which are located in North America, in Chile and in the U.K. As of Dec. 31, 2017, the combined nameplate capacity of power projects was about 2,606.4 megawatts.
GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability & growth rating of 8 out of 10.
During the second quarter of 2018, Pioneer Investments increased its holding by 16.67% to 13,300 shares, Jim Simons increased his holding by 129.25% to 505,680 shares and Paul Tudor Jones increased his holding by 52.17% to 46,964 shares.
David Tepper reduced his holding by 17.51% to 3,404,955 shares.
The recommendation rating is 2.4 out of 5 and the average target price is $12.88 per share.
Disclosure: I have no positions in any security mentioned in this article.
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