Public Service Enterprise
Boasting a nice 4.4% dividend yield, the utility stock Public Service Enterprise Group (PEG) is a lesser-known but very attractive play for investors. The company serves the Mid-Atlantic region and has a valuation of about $16 billion.
Consider that right now, the stock has a beta of 0.15 — meaning that 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, that’s actually 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 50% 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 are 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.