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Showing posts with label Utilities. Show all posts
Showing posts with label Utilities. Show all posts

10 Utilities With The Most Solid Debt And Payout Figures To Boost Future Dividends

Utility dividend paying stocks with low payout ratios and relatively small debt figures originally published at long-term-investments.blogspot.com. The utility sector is a little bit different compared to the other sectors on the capital market.

There is a huge need for capital when utilities think about expansion but they also deliver solid sales and returns. It’s like an infrastructure investment within the economy.

Today I like to apply my current article serial criteria about stocks with high potential to boost dividend payments to the utility sector. I needed to weaken the efforts a little bit. These are the new criteria:

Dividend Payout Ratio below 50 percent
Debt-To-Equity Ratio under 1

As you might see, only ten utilities fulfilled these criteria of which six are currently recommended to buy. It’s really so sector to find low leveraged stocks with small payout ratios. You should definitely look at the technology or healthcare sector to find more results.

IdaCorp is the top yielding pick on the list. I recently put them into the Dividend Yield Passive Income Portfolio which generates currently around $2,500 in passive income.

Here are my favorite stocks:
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IDACORP (NYSE:IDA) has a market capitalization of $2.42 billion. The company employs 2,067 people, generates revenue of $1.080 billion and has a net income of $168.93 million. IDACORP’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $366.54 million. The EBITDA margin is 33.92 percent (the operating margin is 22.45 percent and the net profit margin 15.63 percent).

Financial Analysis: The total debt represents 30.22 percent of IDACORP’s assets and the total debt in relation to the equity amounts to 91.39 percent. Due to the financial situation, a return on equity of 9.88 percent was realized by IDACORP. Twelve trailing months earnings per share reached a value of $3.75. Last fiscal year, IDACORP paid $1.37 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.85, the P/S ratio is 2.24 and the P/B ratio is finally 1.37. The dividend yield amounts to 3.57 percent and the beta ratio has a value of 0.45.

Long-Term Stock Price Chart Of IDACORP (IDA)
Long-Term Dividend Payment History of IDACORP (IDA)
Long-Term Dividend Yield History of IDACORP (IDA)

Transportadora de Gas Del Sur (NYSE:TGS) has a market capitalization of $343.22 million. The company employs 829 people, generates revenue of $443.04 million and has a net income of $41.16 million. Transportadora de Gas Del Sur’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $161.79 million. The EBITDA margin is 36.52 percent (the operating margin is 27.41 percent and the net profit margin 9.29 percent).

Financial Analysis: The total debt represents 33.71 percent of Transportadora de Gas Del Sur’s assets and the total debt in relation to the equity amounts to 91.84 percent. Due to the financial situation, a return on equity of 11.97 percent was realized by Transportadora de Gas Del Sur. Twelve trailing months earnings per share reached a value of $0.29. Last fiscal year, Transportadora de Gas Del Sur paid $0.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.32, the P/S ratio is 0.59 and the P/B ratio is finally 0.98. The dividend yield amounts to 15.39 percent and the beta ratio has a value of 0.63.

Long-Term Stock Price Chart Of Transportadora de Gas Del Sur (TGS)
Long-Term Dividend Payment History of Transportadora de Gas Del Sur (TGS)
Long-Term Dividend Yield History of Transportadora de Gas Del Sur (TGS)

Chesapeake Utilities Corporation (NYSE:CPK) has a market capitalization of $488.48 million. The company employs 738 people, generates revenue of $392.50 million and has a net income of $28.86 million. Chesapeake Utilities Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $79.14 million. The EBITDA margin is 20.16 percent (the operating margin is 14.43 percent and the net profit margin 7.35 percent).

Financial Analysis: The total debt represents 23.35 percent of Chesapeake Utilities Corporation’s assets and the total debt in relation to the equity amounts to 66.76 percent. Due to the financial situation, a return on equity of 11.61 percent was realized by Chesapeake Utilities Corporation. Twelve trailing months earnings per share reached a value of $3.34. Last fiscal year, Chesapeake Utilities Corporation paid $1.44 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.17, the P/S ratio is 1.24 and the P/B ratio is finally 1.90. The dividend yield amounts to 3.03 percent and the beta ratio has a value of 0.47.

Long-Term Stock Price Chart Of Chesapeake Utilities Corporation (CPK)
Long-Term Dividend Payment History of Chesapeake Utilities Corporation (CPK)
Long-Term Dividend Yield History of Chesapeake Utilities Corporation (CPK)

Take a closer look at the full list of utilities with potential to boost dividends. The average P/E ratio amounts to 16.98 and forward P/E ratio is 16.41. The dividend yield has a value of 2.41 percent. Price to book ratio is 1.95 and price to sales ratio 2.38. The operating margin amounts to 22.63 percent and the beta ratio is 1.95. Stocks from the list have an average debt to equity ratio of 0.70.

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

Utilities With Potential To Hike Dividends (Click to enlarge)

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Related Stock Ticker Symbols:
IDA, TGS, CPK, AWR, SWX, SBS, ENI, CWCO, CIG, EQT

Selected Articles:

*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.

First Electric Utility In My Dividend Yield Passive Income Portfolio: IdaCorp

I hit the button for my first eclectic utility stock buy. It was the $2.4 billion corporate IdaCorp that I purchased at $47.94. The total acquisition amount was $963. It’s the lowest weighted stock holding in my Dividend Yield Passive Income Portfolio.

Ida pays 3.17% dividends and hikes its rates recently by 13.2 percent. The new stake will increase my current passive dividend income by $30 bucks or so.

With a current P/E of 12.78 and forward P/E of 14.03, the utility is not expensive in my view. For sure, the market cap is small but IDA is one of the electric utilities with the lowest debt ration within its industry. These is a modest potential to grow the balance sheet and boost sales.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Passive Income Portfolio I (Click to enlarge)

Dividend Yield Passive Income Portfolio II (Click to enlarge)

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For readers who are new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.
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Over the full year, the expected dividend income amounts to $2,441.92. With around $30,000 in deposited cash, it’s still possible to reach the $3,000 by the end of this year.

The portfolio holdings are up since the date of funding by 8.91 percent. Because of the slow purchase process and high cash amounts over the recent year, the full portfolio performance is only up 7.38 percent.

Dividends and Earnings of IdaCorp. 

As of now, the strategy produced an underperformance compared to the overall market but the current situation is not sustainable on the market. Bernanke and the Fed manupulates the stock market. More high-fly momentum stocks like Tesla and Facebook lead the market. Dividend paying stocks are not hot or popular right now. They are boring for many investors. But not for me and I hope you think the same about the philosophy of dividend growth investing.

The goal of this portfolio is to show how to build up a passive income stream for normal investors with small investment budgets. To buy a stock each week for $1,000 bucks is possible for many people with a solid job and a high savings rate.

Portfolio Performance (Click to enlarge)

Here is the income perspective of the portfolio


Sym
Name
P/E Ratio
Dividend Yield
Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
26.75
3.69
28.90
50
$64.75
$1,747.00
LMT
Lockheed Martin C
14.62
3.53
92.72
20
$92.00
$2,560.00
INTC
Intel Corporation
12.92
3.76
21.27
50
$45.00
$1,188.45
MCD
McDonald's Corpor
17.93
3.15
87.33
15
$46.20
$1,453.50
WU
Western Union Com
11.89
2.65
11.95
100
$50.00
$1,864.00
PM
Philip Morris Int
17.59
3.8
85.42
20
$68.78
$1,809.40
JNJ
Johnson & Johnson
19.99
2.82
69.19
20
$50.80
$1,793.60
MO
Altria Group Inc
16.36
5.03
33.48
40
$72.00
$1,422.00
SYY
Sysco Corporation
19.66
3.38
31.65
40
$44.40
$1,302.80
DRI
Darden Restaurant
15.73
4.16
46.66
30
$61.50
$1,373.40
CA
CA Inc.
13.42
3.26
21.86
50
$50.00
$1,536.00
PG
Procter & Gamble
20.76
2.91
68.72
25
$58.20
$1,984.75
KRFT
Kraft Foods Group
17.67
3.70
44.41
40
$80.00
$2,161.20
MAT
Mattel Inc.
19.48
3.2
36.45
40
$55.60
$1,721.60
PEP
Pepsico Inc. Com
19.27
2.7
70.88
20
$44.20
$1,634.80
KMB
Kimberly-Clark Co
20.67
3.26
86.82
15
$47.55
$1,443.00
COP
ConocoPhillips Co
11.82
3.77
61.06
20
$52.80
$1,420.00
GIS
General Mills In
17.5
2.81
42.13
30
$41.10
$1,459.80
UL
Unilever PLC Comm
19.53
3.24
39.65
35
$47.01
$1,446.20
NSRGY
NESTLE SA REG SHR
19.28
3.12
68.69
30
$65.31
$2,095.50
GE
General Electric
18.11
3.11
23.39
65
$49.40
$1,560.65
ADP
Automatic Data Pr
25.88
2.33
61.65
25
$43.50
$1,860.75
K
Kellogg Company C
23.4
2.91
61.52
25
$44.50
$1,514.25
KO
Coca-Cola Company
20.7
2.79
38.83
40
$43.80
$1,576.00
RTN
Raytheon Company
13.94
2.6
57.04
20
$42.00
$1,580.00
RCI
Rogers Communicat
11.6
3.9
46.5
50
$84.00
$2,175.50
GPC
Genuine Parts Com
18.41
2.58
77.06
20
$42.12
$1,626.20
TSCDY
TESCO PLC SPONS A
242
3.79
17.08
110
$75.68
$1,987.70
APD
Air Products and
23.48
2.45
85.71
15
$40.50
$1,628.55
GSK
GlaxoSmithKline P
19.13
4.72
52.16
30
$71.13
$1,515.90
WMT
Wal-Mart Stores
14.84
2.37
79.25
20
$36.16
$1,516.60
BTI
British American
16.59
3.85
111.13
23
$96.14
$2,474.11
CHL
China Mobile Limi
11.24
3.9
55.32
25
$55.95
$1,420.00
MMM
3M Company Common
19.03
2.05
110.27
15
$37.43
$1,800.15
TUP
Tupperware Brands
18.66
2.55
80.98
15
$33.30
$1,287.75
IBM
International Bus
13.73
1.86
197.09
16
$57.60
$3,040.32
HAS
Hasbro Inc.
19.94
3.08
44.09
30
$45.60
$1,463.70
T
AT&T Inc.
26.65
5.14
34.47
30
$53.70
$1,029.45
WAG
Walgreen Co. Comm
24.49
2.04
44.25
30
$34.20
$1,665.60
AFL
AFLAC Incorporate
8.64
2.25
59.39
20
$28.00
$1,246.40
TGT
Target Corporatio
15.76
2.31
68.69
32
$48.32
$2,065.60
CSCO
Cisco Systems In
13.23
2.52
25.12
90
$55.80
$2,205.90
DE
Deere & Company C
9.77
2.28
84.11
15
$29.10
$1,257.30
RGR
Sturm Ruger & Co
12.87
3.17
51.65
20
$38.52
$1,239.80
LO
Lorillard Inc Co
14.09
4.79
42.3
30
$65.00
$1,353.30
UNP
Union Pacific Cor
18.32
1.78
154.75
8
$22.88
$1,276.40
IDA
IDACORP Inc. Com
12.89
3.15
47.94
20
$30.40
$958.80














$2,441.92
$77,743.68














Average Yield
3.14%














Yield On Cost
3.43%