Investing in utility stocks can be a great way to consolidate your retirement income portfolio.
Recent global events have shown that even stock markets in the U.S. are vulnerable. With this, know that your retirement portfolio isn’t an exception
Stock prices are unpredictable from day to day. Dividends, in contrast, are like the Swiss trains of finance; they almost always arrive on schedule, regardless of what kind of turmoil is going on in the market.
Over the past several years, investing in the best utility stocks has proved to be one the easiest and most powerful strategies to achieve solid returns from your investments. So for those investors looking for decent retirement income, here are the top three utility stocks to watch this month.
Consolidated Edison, Inc. (NYSE/ED)
Consolidated Edison, Inc. (NYSE/ED) currently provides an annual dividend of 4.3%. The company has increased dividends for 41 consecutive years. (Source: ConEdison Inc. last accessed July 14, 2015.)
For more than 180 years, Consolidated Edison has served the world’s most dynamic and demanding marketplace—metropolitan New York.
By closely managing costs and working smartly, the company was again able to increase its annual dividend for the 41st consecutive year to $2.60 per share, an 8-cent increase. Consolidated Edison is the only utility in the S&P 500 with 30 or more consecutive years of dividend increases.
Atmos Energy Corporation (NYSE/ATO)
Atmos Energy Corporation (NYSE/ATO) is one of the America’s largest natural-gas-only distributors and manages company-owned natural gas pipelines and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas. (Source: Atoms Energy, last accessed July 14, 2015.)
As it stands, the company has an annual dividend yield of 2.9% and has delivered consistent earnings growth and 31 consecutive years of dividend growth. The company’s goal is to reward its shareholders with nine percent to 11% total return annually.
The company pays a quarterly dividend of 39 cents per share and a payout ratio of five percent as of June 8, 2015.
NextEra Energy, Inc. (NYSE/NEE)
NextEra Energy, Inc. (NYSE/NEE) operates in producing electricity from clean and renewable resources and is among Canada’s most disciplined competitive power generators. (Source: NextEra Inc. last accessed July 14, 2015.)
NextEra continues to deliver consistent dividend growth to its shareholders. The company’s dividends per share grew at a compounded annual rate of 8.4% for the 10 years ended December 31, 2014. In February 2015, the company increased its quarterly dividend to 77 cents per share, an increase of 6.2% from last year.
Currently, the company has a three percent yield with its stock price trading at $101.99.
Keep in mind that utility stocks tend to be less volatile in weak economic circumstances, as the need for their service remains largely unchanged regardless of economic conditions, and therefore investors are usually in less of a rush to sell their lower-risk investments when the market enters into a recession.