I invest in EDE for one reason only. The dividend. I don't really care what the share price does, except when it goes down a bit, I buy some more. When the div. yield gets close to 6% I start looking for some money to buy some more shares.
EDE probably will never see a significant price rise. It will carry along at about the rise in inflation. It really can't do anything else. It is an electric utility. It is regulated. It has to get permission to raise prices. It just isn't the kind of company that is going to see big price increases unless something unforseeable happens. If I wake up one morning and that happens, well great, but I don't care.
EDE is nothing more to me than a 6% savings account in which my principal increases with inflation over and above 6% which makes it about an 8-10% savings account, which today is pretty good.
I am in my mid 30's and maybe will never sell my shares.
I also invest in property, rare coins, a little gold (but only when prices are low), and little else. I almost never sell anything, and prefer to invest in things that give me some sort of paycheck, hence property, EDE, and other div. stocks.
I invest in coins and gold, because I like to look at them and it makes me feel rich. Some coins I have had for over 20 years and have a return of over 1000% if I sold today, but I won't. One day, maybe I will.
I have about 1% of my portfolio in speculative stocks. It's a more enjoyable way to gamble than the casino's.
I drive a '65 mustang. I paid $6500 for it about 7 years ago. It's my main and only car. It treat it like a car and keep it in reasonable shape, but I don't treat it like a show piece. I love it. But what I really love about it, is that I consistantly get offers to buy it for more than $6500. I will probably never sell it, and it will never be worth less than $6500. My wife's car on the other hand cost $35,000 3 years ago, and in another 3 will probably be worth less than $6500. I don't like that car. That car we may sell.
One very real concern for most all of the utility stocks is the 15% qualified dividend.
At this time, it is beginning to look like there is little interest in Congress to extend the qualified dividend provisions. When it expires in another year or so (forgot the date) it will make utilities less attractive and one could expect some prices delcines in the sector.
I don't let tax considerations figure into my calculations when dealing with stock sales or on the dividends. Life is complicated enough without trying to figure if the dividend that you receive is in the 15 or 25% bracket. You don't know that until you get your 1099-Div. and then you are dealing in the past tense. A better and safer investment is to buy I-Bonds, which are government paper. These currently are paying 6.7% and are not subject to any state income tax that might apply if you are living in a state which has such a tax. EDE at best is, and has been, a very ho-hum investment for me to date. Can only judge such investments from when I bought them.
It's all in how you look at it. If I'd bought this EDE at say $18, well sure, I'd be happy as a clam. I, too, bought for the dividend. Had planned to just sit on it and collect. Since buying, I've collected 1.57% while the price has dropped, (at todays prices) 3%. Can't see how this would work out well.
I'm just not good at math - could you explain how this works? You said - "EDE is nothing more to me than a 6% savings account in which my principal increases with inflation over and above 6% which makes it about an 8-10% savings account, which today is pretty good".. Since this date last year EDE has dropped 4% and paid 6% more or less. My simple way of thinking says 2% but I'm sure wanting some of that 8 to 10 percent stuff. Where do I get it ?
scs65: Well, for starters, you got back 1.65% today! You say the price has dropped 3% since you bought it, but the 1.57% you have collected PLUS the l.65% rise today means you are ahead of the game by .22% (1.57% + 1.65% - 3.0% = +.22% GAIN! Now don't you feel better!