by Fred Fuld III
Many investors are looking for high income and are finding it hard to find, especially with the average interest rate on savings accounts is less than one tenth of one percent, according to the FDIC.
One alternative is utility stocks. Utilities are a way of receiving income from dividends along with capital gains potential. There are a few that actually pay yields in excess of 4% and have price to earnings ratio of less than 15.
PPL Corporation (PPL) is an electric and natural gas utility that serves the UK, Kentucky, Pennsylvania, and Virginia. The stock trades at 13.1 times trailing earnings and 12.7 times forward earnings. It pays a dividend yield of 5.2%.
Southern Company (SO) is an Atlanta, Georgia based electric utility that also distributes natural gas. The trailing P/E ratio is 14.4 and the forward P/E is 19.2. The yield is 4.1%.
The Cedar Rapids, Iowa based Interstate Power and Light Company (IPLDP) is a gas and electricity provider that pays a dividend yield of 4.9%. The PE is 1.3.
Maybe one of these electric utilities will spark your portfolio.
Disclosure: Author didn’t own any of the above at the time the article was written.