Dividend.com added a natural gas and electric utility company to the Best Dividend Stocks list and removed a regional electric utility firm from this list.
Founded in 1882, our chosen firm was the first public utility holding company in the United States and it paid its first dividend just a few years later. Since that time, the company has expanded rapidly to become one of the largest utilities serving the Eastern seaboard of the United States, as well as having operations in the United Kingdom, France and other European nations. This vast regional monopoly of distribution and power assets in a key geographical area of the country has allowed our pick to build a strong history of cash flows and profits.
However, our pick isn’t just about providing electrical and gas service, it’s also the nation’s largest distributor of liquefied propane gas (LPG) and has a huge midstream portfolio of assets including pipelines, terminals and liquefaction facilities. These assets provide plenty of growth for the underlying firm.
With its combination of traditional utility assets and faster moving businesses, our pick has the goods to keep its pace of dividend increases going over the long haul. For this reason, it deserves a spot on our Best Dividend Stocks list.
To summarize, here are five reasons why you should own this stock:
- It has paid common dividends for 130 consecutive years and has 27 years of consecutive dividend increases.
- A vast regional monopoly in a highly populated area of the country.
- Uses its master limited partnership (MLP) subsidiaries effectively to minimize taxes and boost its own cash flows.
- It’s becoming increasingly global in its operations.
- A low payout ratio of less than 40% and a growing yield of 1.91%.
Soft Removal of a Regional Electric Utility From the Best Dividend Stocks List
We added this utility stock to the Best Dividend Stocks list just under a year ago. The stock has performed amazingly well in that time, driven by its extensive alternative energy growth profile and dividend strength. However, to make room for our top multi-utility pick, we are soft removing it from the list. Our regional utility name still features strong metrics in our DARS model and, in fact, scores very high across all measures. Nonetheless, our rules-based system favors stocks with larger market capitalizations. In the case of two stocks with identical DARS scores, the one with the greater total market cap earns placement on the list. In this case, it’s out with the old regional utility and in with the new one.