Regulators typically set customer rates for utilities to ensure investors recover a fair return on capital and allows the businesses keep their systems well maintained. This means utilities companies are among the most defensive investments with solid cash flows and high dividend payouts. Therefore, these companies provide a strong reliable stream of constant income which is a great diversifier during economic downturns. As a long term investor, I favour these utilities stocks with great dividend payments that continues to add value to my portfolio.
Just Energy Group Inc. (TSX:JE)
JE has a large dividend yield of 9.82% and the company currently pays out 42.96% of its profits as dividends , with analysts expecting the payout in three years to be 80.21%. JE’s dividend is not only above the low risk savings rate, but also amongst the top dividend payers in the market. Comparing Just Energy Group’s PE ratio against the Global Multi-Utilities industry draws favorable results, with the company’s PE of 4.4 being below that of its industry (19.8). Dig deeper into Just Energy Group here.
Valener Inc (TSX:VNR)
VNR has a sumptuous dividend yield of 5.19% and the company has a payout ratio of 82.58% , with analysts expecting a 85.72% payout in the next three years. With a yield above the savings rate, bank account beating investors will be happy, but perhaps even happier knowing that VNR is in the top quartile of market payers. Valener seems reasonably priced when looking at its PE ratio (16.3). The industry average suggests that Global Gas Utilities companies are more expensive on average 22.8. Interested in Valener? Find out more here.
Superior Plus Corp. (TSX:SPB)
SPB has a great dividend yield of 6.06% and a reasonably sustainable dividend payout ratio , with analysts expecting this ratio in three years to be 88.40%. Despite SPB’s last payment of $0.72 being lower than their dividend per share 10 years ago of $1.56, the company has been reliable in its payout to shareholders, not missing a payment during this time. Superior Plus has had strong and consistent earnings over the last five years, with the company averaging double digit EPS growth of 37.74%. Continue research on Superior Plus here.
For more solid dividend payers to add to your portfolio, you can use our free platform to explore our interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.