These four can also handle higher rates

Article Excerpt

Rising interest rates have dampened investor enthusiasm for high-yielding utility stocks. That’s because higher rates add to a utility’s interest costs and, at the same time, they increase the appeal of competing bonds by spurring their yields. However, these four utilities get most of their revenue from rate-regulated businesses. That gives them sufficient cash flow to cover their higher interest costs and keep investing in new projects. Their new assets will also let them keep raising your dividends. FORTIS INC. $53 is a buy. The company (Toronto symbol FTS; Conservative & Income Portfolios, Utilities sector; Shares outstanding: 471.2 million; Market cap: $25.0 billion; Price-to-sales ratio: 2.4; Divd. yield: 4.3%; TSINetwork Rating: Above Average; www.fortisinc.com) is the main supplier of electrical power in Newfoundland and PEI. It also owns electrical utilities across Canada, the U.S. and the Caribbean. In addition, the company distributes natural gas in British Columbia, Arizona and New York State. Thanks to higher power demand and rates, as well as the startup of new…