Three Electric Utilities to Own, Three to Avoid [View article]
Having owned various utility stocks for over 30 years, I would suggest only a very modest exposure to the sector. The stocks hardly grow, and dividends are reduced from time to time.
As one example, I bought AEP in 1981 and still own the shares. In 1981 the dividend was $2.5/yr, but it was cut about 10 years ago, and today it is $1.64/yr. If you adjust for true inflation, the income from its dividend in terms of buying power is now roughly one-sixth of what it was when I bought the stock, 27 years ago!
Moreover, if and when interest rates rise, utilities are likely to plunge. So buyer beware.
Three Electric Utilities to Own, Three to Avoid [View article]
As one example, I bought AEP in 1981 and still own the shares. In 1981 the dividend was $2.5/yr, but it was cut about 10 years ago, and today it is $1.64/yr. If you adjust for true inflation, the income from its dividend in terms of buying power is now roughly one-sixth of what it was when I bought the stock, 27 years ago!
Moreover, if and when interest rates rise, utilities are likely to plunge. So buyer beware.