12/08/2012

Best Utility Dividend Stock Picks For 2013

The utility sectors offers generally high dividend yields with value. The negative point is that the sector is very capital intensive and the growth potential is limited. However, I wanted to know what stocks are the best dividend stock buy picks for the next year. I screened all 123 listed utility stocks by the best ones for next year. My criteria are:

- Forward P/E under 15
- Past Sales growth recent 10 years over 5 percent
- Positive Earnings per share growth for the next five years
- Operating Margin over 10 percent

Twelve companies fulfilled the above mentioned criteria. Eight of them have a buy or better rating. The mostly represented industry is the eclectic utility industry. I personally don’t own any utility stocks because I am a dividend growth investor. I always look for growing companies with strong brands and high abilities to expand aboard. Utilities don’t fulfill these criteria. So my main focus will be on the consumer sector.

Here are my favorite stocks:
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National Grid (NYSE:NGG) has a market capitalization of $41.25 billion. The company employs 25,645 people, generates revenue of $22.180 billion and has a net income of $3.268 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.602 billion. The EBITDA margin is 34.28 percent (the operating margin is 25.08 percent and the net profit margin 14.73 percent).

Financial Analysis: The total debt represents 48.64 percent of the company’s assets and the total debt in relation to the equity amounts to 249.22 percent. Due to the financial situation, a return on equity of 22.25 percent was realized. Twelve trailing months earnings per share reached a value of $5.08. Last fiscal year, the company paid $3.15 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.17, the P/S ratio is 1.86 and the P/B ratio is finally 2.83. The dividend yield amounts to 5.59 percent and the beta ratio has a value of 0.63.


”Long-Term
Long-Term Stock History Chart Of National Grid (NGG)
”Long-Term
Long-Term Dividends History of National Grid (NGG)
”Long-Term
Long-Term Dividend Yield History of National Grid (NGG)

FirstEnergy (NYSE:FE) has a market capitalization of $17.34 billion. The company employs 17,257 people, generates revenue of $16.258 billion and has a net income of $869.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.835 billion. The EBITDA margin is 17.44 percent (the operating margin is 10.54 percent and the net profit margin 5.35 percent).

Financial Analysis: The total debt represents 36.63 percent of the company’s assets and the total debt in relation to the equity amounts to 130.55 percent. Due to the financial situation, a return on equity of 7.95 percent was realized. Twelve trailing months earnings per share reached a value of $2.53. Last fiscal year, the company paid $2.20 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.38, the P/S ratio is 1.07 and the P/B ratio is finally 1.31. The dividend yield amounts to 5.31 percent and the beta ratio has a value of 0.42.


”Long-Term
Long-Term Stock History Chart Of FirstEnergy (FE)
”Long-Term
Long-Term Dividends History of FirstEnergy (FE)
”Long-Term
Long-Term Dividend Yield History of FirstEnergy (FE)

Duke Energy (NYSE:DUK) has a market capitalization of $45.30 billion. The company employs 18,440 people, generates revenue of $14.529 billion and has a net income of $1.713 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.575 billion. The EBITDA margin is 31.49 percent (the operating margin is 19.06 percent and the net profit margin 11.79 percent).

Financial Analysis: The total debt represents 33.59 percent of the company’s assets and the total debt in relation to the equity amounts to 92.22 percent. Due to the financial situation, a return on equity of 7.53 percent was realized. Twelve trailing months earnings per share reached a value of $3.15. Last fiscal year, the company paid $2.97 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.44, the P/S ratio is 3.12 and the P/B ratio is finally 1.26. The dividend yield amounts to 4.76 percent and the beta ratio has a value of 0.34.


”Long-Term
Long-Term Stock History Chart Of Duke Energy (DUK)
”Long-Term
Long-Term Dividends History of Duke Energy (DUK)
”Long-Term
Long-Term Dividend Yield History of Duke Energy (DUK)

Take a closer look at the full list of my best utility stock picks for next year. The average P/E ratio amounts to 15.33 and forward P/E ratio is 12.49. The dividend yield has a value of 3.99 percent. Price to book ratio is 1.45 and price to sales ratio 1.61. The operating margin amounts to 20.66 percent. The average stock has a debt to equity ratio of 0.94.

Here is the full table with some fundamentals (TTM):

Best Utility Dividend Stocks For 2013 (Click to enlarge)

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Related stock ticker symbols:
NGG, FE, EDE, DUK, WR, GXP, CWCO, EOC, ENI, CPK, SBS, ELP

Selected Articles:

* For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.


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