Consolidated Edison (ED): A high-quality dividend payer
By Chloe Lutts Jensen, Chief Analyst, Cabot Dividend Investor
From Cabot Wealth Advisory 10/1/15 Sign up for Cabot Wealth Advisory—it's free!
For investors who rely on regular income from their investments, high-quality dividend payers are the best vehicle for maintaining a steady income during troubled times in the market. They lose less of their value during corrections, they’re less volatile overall and they keep paying you regardless of what prices are doing.
Dividend Aristocrat Consolidated Edison (ED) is one of my Cabot Dividend Investor holdings. I recommended the stock in February 2014 and it’s provided a 29% return since then, including a 4.8% dividend yield on cost. Here’s what I wrote to my subscribers about the stock in my update yesterday:
“Consolidated Edison (ED 66 – yield 3.9%) – A flight to safety and the deferral of rate hikes have propelled ConEd through a full recovery of August’s losses. The latest delay in rate hikes and the scary market environment could even lead to a short-term utility rally over the next couple of months. ED is a Hold for safe income investors.”
If you’re a dividend investor or want to be, I urge you to check out Cabot Dividend Investor. This conservative advisory includes a three tiered income approach for investors seeking income now or income in retirement. Click here to order.
High Dividend Utility Stocks #1
By Chloe Lutts Jensen on February 03, 2015
Originally from Cabot Wealth Advisory
Consolidated Edison (ED) is the electric utility for New York City and the surrounding area (They're my electric utility, in fact). Con Ed has increased its dividend for 41 years in a row, including the latest increase announced last month. The new annual dividend of $2.60, or 65 cents per quarter, is about 3% higher than the previous dividend of $2.52 per year. That's even better than expected growth, based on ED's average annual dividend increases of just under 2% over the past five years, and the dividend's longer-term growth rate of slightly over 1% over the past decade.
This reflects the utility's slow-and-steady earnings growth; EPS are only expected to increase 2% over the next two years, but cash flow is reliable (90% of operations are regulated). Management recently raised its earnings guidance for 2014, citing improved operational efficiency.
Con Ed's long-term credit rating is BBB+/A3. The gross profit margin (which reflects efficiency) is very competitive at 69%. Overall, IRIS (my proprietary dividend stock rating system) gives ED a Dividend Growth Rating of 7.0 and a Dividend Safety Rating of 9.9, both out of 10.
By my rough estimate, if I owned 300 shares of ED, the company would send me dividend checks every month that more than covered the utility checks I have to send them. Wouldn't it be nice to pay the utility company with its own money?