Consolidated Edison (ED) hasn’t really gone anywhere since early 2012 as the market has gotten a bit more “risk on.”
But investors in utility stocks like ConEd shouldn’t ever expect big fireworks and huge share price appreciation — and when times are tough, there are worse things in the world than simply hanging tough.
After all, utilities are highly regulated companies with geographic monopolies. It’s almost impossible for them to grow, short of acquiring a neighboring electricity provider.
But as a low-risk investment, this barrier to growth should be seen as a high wall to competition, too. After all, when is the last time you heard of a new utility company rolling into town and poaching the old power provider’s customers?
ConEd is an entrenched and well-oiled dividend machine. The company has paid dividends in some form since 1885, and payouts are very sustainable at just 64% of next year’s earnings. The current yield for ED is 4.4%.