Consolidated Edison (ED)
Consolidated Edison (ED) is down 3% since Nov. 6 and has a dividend yield of 4.6%. Although ED’s forward P/E of more than 14 seems a little high, it is in line with other utility-sector dividend stocks. On the down side, ConEd is experiencing flat revenue growth in its regulated utility businesses — in large part because regulators have moved to freeze utility rates.
That said, much of the nation has experienced brutal winter weather — and ConEd’s metropolitan New York regulated service area has experience more than its fair share, driving up gas and electric consumption. Although the New York Public Service Commission voted on Thursday to freeze ConEd’s electric and gas rates for two and three years respectively, the rate freeze affects only delivery charges, not the cost of the commodities.
That means ConEd will still be able to move ahead with $1 billion in infrastructure upgrades over four years. Despite near-term profit pressures, ED is likely to remain one of the best dividend stocks for investors.
As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.