Regulators typically set customer rates for utilities to ensure investors recover a fair return on capital and allows the businesses keep their systems well maintained. This means utilities companies are among the most defensive investments with solid cash flows and high dividend payouts. These businesses, therefore, generate robust cash flows and payout high income to shareholders, making them valuable diversifiers during downturns. I’ve identify the following utilities stocks paying high income, which may increase the value of your portfolio.
OPG Power Ventures PLC (AIM:OPG)
OPG has an appealing dividend yield of 4.31% and the company currently pays out 11.63% of its profits as dividends , with analysts expecting the payout ratio in three years to be 43.02%. OPG’s dividend alone will put you better off than your bank interest, but the company’s yield isn’t only higher than the low risk savings rate. It’s also amongst the market’s top dividend payers. OPG Power Ventures’s earnings growth over the past 12 months has exceeded the global electric utilities industry, with the company reporting an EPS growth of 59.58% while the industry totaled 5.25%.
Centrica plc (LSE:CNA)
CNA has a large dividend yield of 8.33% and pays out 115.69% of its profit as dividends . Despite some volatility in the yield, DPS has risen in the last 10 years from £0.1115 to £0.12.
SSE plc (LSE:SSE)
SSE has an appealing dividend yield of 6.90% and is currently distributing 68.23% of profits to shareholders , with the expected payout in three years being 76.07%. In the case of SSE, they have increased their dividend per share from £0.58 to £0.913 so in the past 10 years. Much to the delight of shareholders, the company has not missed a payment during this time. SSE’s performance over the last 12 months beat the global electric utilities industry, with the company reporting 69.82% EPS growth compared to its industry’s figure of 5.25%.
For more solid dividend payers to add to your portfolio, you can use our free platform to explore our interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.