Thanks for the replies on utilities. Briefing.com also said to look for "low cost producers" without saying what that meant. How do you identify a "low cost producer". Also, I mis-spoke on LIL - they did give 7.4% yield, but now give 4.9%, I think, confirming what another poster said about LIL possibily being in trouble. Been looking at PPL. They give a 7.4% yield and seem to be in much better shape (reasonable debt-to-equity, reasonable price-to-earnings, O.K. analysts reccomendations, etc.) Any more comments? Other defensive stock recommendations? LLY is up almost a point!
At least for electrics, I think the most common cost measure for production is cost per KW, MW or GW. Mix of generating capacity is also important. I'm sure if you spend a little time looking at any majors 10-K you'll figure out pretty quickly what the key measures are that they focus on.
The reason for the 7.4% yield on PPL is that investors have driven the price of the stock down, so as a result you're getting that high yield. Question to ask yourself is, with most stocks (even utilities) yielding much less than 7.4%,why is PPL commanding such a low price to bring about this yield. It seems that in today's environment, a high yield may be a red flag of sorts (like maybe people don't really believe the Co. will be able to continue paying $l.67 per share dividend).