Public Service Enterprise Group
Among stable dividend picks, utility stocks are one of the preferred sectors. And boasting a nice 4.4% dividend yield, the mid-Atlantic utility Public Service Enterprise Group (PEG) is a lesser-known but very attractive play in this space.
Consider that right now, the stock has a beta of less than 0.2 — meaning it moves much slower than the rest of the market in either direction. Detractors warn that utilities will never set off the fireworks with a breakout week or month, but if you’re a low-risk dividend investor, this is a big plus and not a weakness. Should the market somehow hit a major snag, PEG will stay much more stable than other picks.
Also, despite its big yield, the payout ratio for PEG is less than 60% of projected fiscal 2013 earnings. This is the mandate not just for sustained dividends, but growing payouts, too.
The icing on the cake is that utility stocks like PEG are virtual monopolies in their geographic region and highly regulated, which prevents disruption to their business. Considering the strong baseline demand and the lack of competition, you can’t get more low-risk than a utility like Public Service Enterprise.