Friday, August 28, 2009
Utility Stocks: Looking for Good Relative Yield
As Dave Kansas points out in his recent article, stock dividends do make a difference, particularly when other forms of yield--such as Treasuries--are offering paltry returns. Dave makes the excellent point that dividends are typically taxed at lower rates than bond income, which could help support the prices of higher-yielding equities.
Of the sectors tracked by FinViz (click above), utilities show up with the highest yields. While they may not be sexy for their beta (they're up around 30% for the past six months vs. 50% for many of the other sectors), they may find nice floors as those nearing retirement seek relatively safe yield.