The Appeal of Utilities Stocks
by Stuart Chaussee
When building a portfolio of dividend-paying blue-chips, there's no better place to start than the utility sector. The group has historically paid the highest dividends, and that high cash flow appeals to more conservative investors and/or retirees who need income from their investments.
It certainly makes sense to allocate a decent percentage of your total portfolio to this sector, in perhaps four to five stocks. Although other sectors have greater potential for capital appreciation, utilities, chosen well, can also provide you with excellent capital gains.
Why Utility Stocks Deserve Your Attention
1. They offer you a much higher-than-average dividend yield. The sector yields about 5%, which is more than three times the yield of the S&P 500, which stands at about 1.6%.
2. They offer dividend growth potential, albeit often less than that of other stocks with lower dividend payout...
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