"One utility that's looking particularly appetizing now is Duke Power (DUK, NYSE, around $28)," says Utility Forecaster of Alexandria, Va.
"First-quarter profits at the Charlotte utility soared 8.9 percent, despite the recession. But the former Wall Street darling's stock price has fallen nearly 15 percent from its highs. It's unlikely that this problem will derail the company's superior earnings record. Duke has an impeccable balance sheet. The utility earns a credit rating of 'A' from S&P.; Take advantage of the pullback and buy."
"Nearly 175 years ago, the Gas Light Co. installed the first gas lighting system in the U.S.; the utility company has since evolved into Baltimore Gas & Electric (BGE, NYSE, around $29), one of the nation's most admired utilities," says Geraldine Weiss of Investment Quality Trends, La Jolla, Calif.
"With the end of the recession, we think earnings will brighten and the company will return to its former vigor. The stock, yielding 7.3 percent, has the potential of doubling before reaching overvalued levels.
"Because of the severe downturn in New York City's economy, and also in light of last winter's warmer-than-normal temperatures, Consolidated Edison (ED, NYSE, around $24) sales and earnings were down in the latest quarter," says Argus Research of New York.
"Nevertheless, the utility's balance sheet is still rock solid. Investors will find these shares represent an electric utility that scores the highest on virtually all measures. These shares appear exceptionally well-suited for investor seeking dividend security. . .
"Connecticut Energy (CNE, NYSE, around $18), a natural gas utility that serves customers in three Connecticut counties, has paid consecutive cash dividends on its common stock for 141 years, longer than any other non-financial company on the NYSE," says The Clean Yield of Greensboro Bend, Vt.
"The outlook is bright. The stock currently provides a yield of 7.2 percent. For investors looking for a utility with a safe and relatively high dividend payout, this stock is well worth considering."