A regulated utility serving homes and businesses across the Inland Northwest is paying out one of the more generous yields in its sector right now, and the portfolio just added to its position. The stock’s forward dividend yield sits at 5.24%, well above the 3.4% average for its Integrated Utilities peer group, and that gap alone puts it in the top 40% of all dividend paying stocks we track. A yield this far above the pack usually invites questions about safety, but this company backs it with a 24 year streak of consecutive increases that ranks among the longest in the entire dividend universe.
The underlying business runs power and gas lines to roughly 429,000 electric customers and 386,000 gas customers spread across a mix of residential, commercial and industrial accounts, plus a smaller electric operation in a neighboring state. Growth for a business like this rarely comes from chasing new customers. It comes from adding load and convincing regulators to approve fair rates, which makes the regulatory relationship as important to earnings as anything happening on the ground.
Recent wildfire activity near the company’s home base knocked out service for thousands of customers and introduced a new layer of uncertainty around cost recovery, even as management held its long-term earnings growth target steady. A pending large industrial power request was set aside for now rather than rushed into a deal that could burden existing ratepayers, a decision that says something about how the company is managing risk during a stretched balance sheet period.
Weighing a well above average yield against a payout ratio that has crept higher and a debt load still working through a pending rate case, we chose to increase our position in the Best High Dividend Stocks Portfolio rather than step back. The combination of a long increase streak, low stock price volatility and a yield that clears our screening bar outweighs the near-term noise around wildfire costs and regulatory timing. This action reflects the portfolio’s mandate to prioritize durable income over chasing outsized growth.
