Tag: utility stocks

What are utility stocks?

Utility stocks are shares in companies that provide electric power, telecommunications and pipeline services. At TSI Network, we continue to recommend that income-seeking investors buy high-quality utility stocks instead of bonds. Utility shares have always been great sources of tax-advantaged dividend income.

While most utility stocks are steady income producers, some utilities also offer opportunities for growth. This happens mostly when utilities want to expand into new markets or geographic regions.

When looking for investments in utility sectors, investors should avoid judging a company based solely on its dividend yield. That’s because a high yield can sometimes be a danger sign rather than a bargain. For example, a company’s dividend yield could be high simply because its share price has dropped sharply (because you use a company’s share price to calculate yield). That can be a sign of an imminent dividend cut.

Apart from a good dividend yield, the utility stocks you invest in should have a long history of paying (and raising) their dividends. For a true measure of stability, focus on those companies that have maintained or raised their dividends during economic and stock-market downturns.

At TSI Network, we recommend using our three-part Successful Investor philosophy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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Focus on high yields that are sustainable

August 11, 2022||ETFs

High-yielding ETFs have appeal for income-seeking investors. The income they provide can also provide a buffer in declining markets. However, you need to look closely at the strategies that let those ETFs pay their high yields—and whether they are worth the risks.
Below we look at… Read More

Emera’s rising dividend is a big plus

April 28, 2022||Dividend Stocks

Emera’s shares recently hit a new all-time high. That in part reflects the ongoing success of its Florida power utility, acquired in 2016.
Historically low interest rates in the past few years have also spurred investor demand for high-yielding utility stocks like Emera. Even though interest… Read More

These four utilities still top bonds

August 12, 2021||Dividend Stocks

Although it looks like interest rates will start moving up again in 2022, we continue to prefer high-quality utility stocks over holding bonds.
The four utility stocks below are top alternatives to bonds given their long track records of increasing their dividends even as rising interest… Read More

Utilities are a key part of a sound portfolio

March 11, 2021||ETFs

Utility stocks are shares in companies that provide services like electric power, telecommunications, and pipeline transportation. While most utility stocks are steady income producers, some utilities also offer opportunities for growth. This happens mostly when utilities expand into new markets or geographic regions.
Utility stocks, or… Read More

Beware rules of thumb

January 28, 2021||Dividend Stocks

Here’s an Excerpt from a recent issue of Advice for Inner Circle Pro Members:
“Early in my investment career, I developed a keen interest in what we called “investor rules of thumb.” Here are some random examples:
“Stocks trading at a P/E ratio of 10 times per-share… Read More