Dividend.com has added another utilities company to the Best Dividend Stocks list. Our Best Dividend Stocks list reflects the sector rotation that keeps happening in the markets – utilities have been on a tear in 2016. They defied the market downturn in the early part of 2016 by going up when the market was going down. And then they kept going up when the markets stayed flat in H12016. Our latest addition is indicative of what’s going on in the markets with regards to investors favoring utilities.
Relative strength or price performance, one of the five parameters we use to rate stocks, has been doing very well for this growth-oriented utility that we are adding to the list. It also yields well above the S&P 500 average yield and has had more than 11 consecutive years of dividend increases.
While experts previously predicted that higher interest rates meant that utilities stocks would go down, our research shows otherwise.
Since the Fed is unlikely to raise interest rates in the near term – and is even thinking about the possibility of using negative rates should the economy stumble and need an extra monetary boost – the outlook for utilities seems sunny. Again, confounding the experts’ predictions that higher rates would make utilities a poor choice.
To summarize, here are 4 reasons why this stock is being added to the Best Dividend Stocks list:
- Aided by the anxiety produced in markets in early 2016, utilities have been on a tear.
- Lack of intent from the Fed in raising interest rates boosts the outlook for utilities.
- Analysts estimate a 5.6% growth in earnings in 2017, which points to another year of dividend increase that the company might reward investors.
- The company has invested in cleaner energy sources, thereby meeting a new legislation passed by the state it operates in.
Soft Removal From The Best Dividend Stocks List
We are removing a services stock that was on our list since 07/07/14. Since then, the stock has given a return of 12%, excluding dividends. Even though we are removing it from the list, we continue to view it positively. It maintains its rating of 3.5 and classification as ‘recommended’.