[Boomer]

Disclaimer: Please keep in mind that this thread-start is simply to invite general discussion. I have no letters behind my name to announce that I am supposed to know anything at all about anything financial. Just so you know, I am not advising anything. There is risk involved with any stock.

I am somewhat conservative in investment choices and I have been that way for quite a while, although.....(Shameless Confession: I did so love that bubble-dancing I did with those tech stocks back in the 90’s -- but not for long. Ah…..youth…..But I learned a lesson – that old one about how if it seems too good to be true…..Oh well, like I have said before, I never bet the whole farm, just my little stash of butter and egg money.)

Anyway, I have been thinking about adding more utilities to my boring little portfolio and was wondering whether any TOTVers have any thoughts on the topic of utilities stocks. (HEY! WAKE UP! THIS COULD BE FASCINATING!)

And, yes, I most certainly acknowledge the advantage there could be in buying into mutual funds and/or ETF’s to pick this stuff out for me, but where’s the fun in that? (Actually, I like to handle my own buys and sells, for various reasons. But even at that, I am mostly a buy-and-hold kind of girl – though Mr. Boomer is my second husband.)

Here is a link to a recent article (8/24/2010) titled “Top 10 Dividend Yielding U. S. Utilities.” There is a brief summary of each. This article has simply sorted the stocks by yield, which, of course, probably has changed a little since the date of the article, a couple of weeks ago. I am looking at this article (from the world of information-overload) as a starting point only. I know yield is not everything.

I sincerely welcome any thoughts out there on any of the utilities in this article or any other utilities stocks?

http://seekingalpha.com/article/2220...-u-s-utilities

Boomer

[Hawkwind]

Very interesting and I will be looking into it as well and when I saw First Energy #1 on the list I was really surprised. I live in a suburb of Akron. Nice returns if they are still at that rate.

I use to work with a guy that made a killing on utility stocks years ago. This was after Three Mile Island and his take was not to invest in anything that had to do with nuclear power. Times have changes a lot since then but I still keep that in mind.

[mrbillmidlo]

Stick with the DRIP (div reinvest prog), it's hard to go wrong. If the utility is any good it will be bought out. FE is buying AYE.

[aljetmet]

I found a small north west utility "POR". currently yields 5.2% I've been lucky buying 5/09 and some more 5/10 Have earned over 15% thus far....

[2 Oldcrabs]

I retired from a utility. They have place in your portfolio for the dividend they pay. I would not not put more than 10-15% in them. They sometimes borrow money to pay the dividend. High dividends keeps the stock price up. Look at EPS vs Dividends paid. Also look at what the insiders are doing.

[Kelsie52]

I have worked for a Utility fo 40 years --about to retire next month --I have been purchasing our stock for over 25 years and it has served me well.

It has paid a constant dividend over 5% --

If you ever watch Mad Money --Kramer advises to have certain utilities in your portfolio--

I do believe that no more than 10% of your savings should be in any one instrument --

Good Luck

[batman911]

I currently hold HE long term. HE has a near monopoly on electric power in Hawaii. They also own American Savings Bank. The dividend is a little lower than some other utilities but they have a captive audience and no nuclear exposure.

Utilitiy stock prices have gone up over the past 12 months so take a good look at the PE. I believe there may be a significant down side if interest rates go up and investors start to bail out of utilities and into bonds again. The current dividends (more or less 5%) are nice but there is risk in the value of the stock. Decreasing utility stock prices could erase your dividend income and more.

Not forecasting, just acknowledging the risk.

[chuckinca]

After PG&E just blew up 35 houses in San Bruno, CA I think I'll back away from utilities until the dust settles.


.

[Boomer]

Yes. Good comments -- DRIP. Diversification. Risk Tolerance. Yield is not everything.

Picking up a stock when it has been beaten up for no good reason, resulting in a higher than usual dividend yield, can work out well. But you want that company to be able to continue to pay and even to raise the dividend.

When I look at the ratio of the dividend-payout to the EPS, I can get pretty cozy when the dividend hovers around half. Some dividend investors will say 60% but, at that point, they might get a little concerned about the sustainability of the dividend and start watching more closely. Even if it is a company that has been around forever and is likely to stay around forever, a cut in the dividend can play some real havoc with a stock price for a while.

When buying individual stocks, you really need to pay attention and understand your own timeline and personal tolerance for risk. And that diversification thing is crucial.

And like I always say when I write this stuff, I have no idea what I am talking about. In fact, I have a shameless confession to make…..

Every now and then Trigger-Finger Boomer has to pay a little visit to sassy old Buyanhold Boomer. Such visits go like this…..

Trigger-Finger Boomer: WAKE UP! Get off that Talk of the Villages site and get your fat behind over to Yahoo Finance. Take a good look at stuff, stock by stock. Click on Key Statistics and that other stuff over there on the left side of the screen and figure out what all that info means NOW!

Buyanhold Boomer: Huh? What? Trigger-Finger Boomer! What are you doing here! You are one scary you-know-what when you barge in here and interrupt my emailing and my posting on TOTV and my checking to see what kind of chickflicks I can drag Mr. Boomer to.

Trigger-Finger Boomer: YOU HEARD WHAT I SAID. DO NOT MAKE ME REPEAT MYSELF. And keep in mind that I NEVER once told you that this choice of yours to invest in individual stocks would be like shooting fish in a barrel. NOW, DO EXACTLY AS I SAID.

Buyanhold Boomer: ok.

.......................................

Boomer

[aljetmet]

Back in May 2009 bought POR. Bought similar amount in May 2010.
REvinvesting dividends now @5.2% and have 15%+ return....
Stock has been fluctuating and I bought at the low of the cycles....
Sometimes you get lucky.

[TomW]

With cap & trade certainly dead as a result of the election yesterday, utilities will warrant a fresh look.

[DaveK]

Another place to get information is from Value Line Investment Survey. I don't know if there are copies at a nearby library such as Ocala - you may have to go all the way to Orlando. Value Line has historical data as well as analyses of 1,200 stocks. I use it for the historical data mostly, then make my own decision as to what I want to buy. The editors have a number of pages where they screen the stocks for dividends, potential growth, safety, and other factors derived from theis analyses. A really useful publication. My wife subscribes to it even though it is expensive as we consider we need the reference data if we are to manage our financial affairs so our money lasts until we croak. I bought a half dozen dividend-paying stocks a year or two ago and have make out very well. But I'm like Boomer, buy a good stock and hold on to it.