When I set my utility positions up, I did it by geographical region. I will continue to do so. I think it's a sound strategy.
I currently own 9 utilities. ... AVA, D, EXC, NGG, PNY, SCG, SO, SRE and UNS. I own NGG for their International exposure, not their NE exposure.
I'm also in the process of researching my utility companies now for potential re-balance or replacement. I'm looking for a minimum yield of 4%, but my focus will be on the dividend growth. ED will never make my portfolio on dividend growth, but it is a safe company, and for those who want the additional safety, I understand why they own it.
I would like the dividend growth rate to be above 4% as well. I'm actually looking for the yield and dividend growth rate to equal 8% or better.
I don't own NWN, but I will look into them. They have a 3.7% yield, so price would have to come down a little to meet my 4% yield, but here are their dividend growth rates:
1 year - 4.2%
3 year - 4.8%
5 year - 4.7%
10 year - 3.5%
The last 5 years have shown the type of minimum growth I'm looking for. Of course the company has to meet my credit ratings and outlook, which I haven't researched yet, it's just that this one is on the bubble of being a potential candidate.
Again, I haven't looked at the following companies other than yield and dividend growth. But these are the criteria I am interested in.
NJR:
1 year - 5.9%
3 year - 9.6%
5 year - 8.4%
10 year - 6.3%
The yield is 3.7% so the price would have to come back a little before I would consider this company. I need that 4% yield to help insure a decent long term total return.
Again, I'd need to research them first. I'm just not going to research them until they meet my yield and dividend growth criteria.
A ute that does qualify for purchase, and I already own it, is AVA.
Yield 4.6%
1 year- 10.0%
3 year - 16.8%
5 year - 14.1%
10 year - 8.6%
With that yield and if the dividend growth stays above 5%, this one should do well long term.
I do have SCG under review. I may replace this one.
The yield of 4.1% is fine, but the dividend growth rates have dropped off.
1 year - 1.8%
3 year - 2.0%
5 year - 3.2%
10 year - 5.0%
I've been patient long enough on the dividend growth. The trend is headed the wrong way. Time to lock in profits and find another company growing the dividend at a higher rate. It shouldn't be too difficult to equal the yield. |
