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7/05/2013

The Best Performing Utilities And Which Of Them Are Still Cheap

Utility dividend stocks with highest performance year-to-date originally published at long-term-investments.blogspot.com. 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. I 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.

You can find a small list of the 20 best performing utility dividend stocks. I excluded all companies with a market capitalization below 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:
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OGE Energy (NYSE: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.


Long-Term Stock Price Chart Of OGE Energy (OGE)
Long-Term Dividend Payment History of OGE Energy (OGE)
Long-Term Dividend Yield History of OGE Energy (OGE)



UGI Corp (NYSE: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. 



Long-Term Stock Price Chart Of UGI Corp (UGI)
Long-Term Dividend Payment History of UGI Corp (UGI)
Long-Term Dividend Yield History of UGI Corp (UGI)

Atlas Energy (NYSE: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.



Long-Term Stock Price Chart Of Atlas Energy (ATLS)
Long-Term Dividend Payment History of Atlas Energy (ATLS)
Long-Term Dividend Yield History of Atlas Energy (ATLS)

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.

Here is the full table with some fundamentals (TTM):

The Best Performing Utility Dividend Stocks (Click to enlarge)

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

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*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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