Top 5 Sustainable Utility Dividends: Yield, Safety and Upside

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Hauppauge, N.Y. (PRWEB) June 14, 2012

Target Rock Advisors, LLC today released its Top 5 sustainable utility dividend picks for investors seeking above-market current income with appealing risk-adjusted total return potential in a market characterized by economic uncertainty and price volatility.

Target Rock’s Top 5 sustainable utility dividend picks are: Entergy Corporation (5.0% yield), American Electric Power Company, Inc. (4.7% yield), ALLETE, Inc. (4.5% yield), Avista Corporation (4.4% yield) and NV Energy (3.9% yield).

“I think it’s fair to say that markets are less defensive in posture and frantic in flight to safe haven investments today than they were at the beginning of the month,” said Kyle Rudden, a Target Rock Partner and co-founder. “Interest rate cuts in Australia and China, as well as heightened hopes for central bank easing in the U.S. and Europe have calmed investor nerves a bit.”

“But there’s still plenty to fret over,” he added, “at the very least continued uncertainty and until we’re substantially more out of the woods, carefully analyzed and chosen utility stocks are a great way to ride out the storm. The average yield of our Top 5 is 4.5% with an average mid-case total return projection of 9.5% and decent downside protection. That compares favorably to the 1.6% yield on the 10-year treasury note and 2.1% and 3.0% average dividend yields for the S&P 500 and Dow Jones Industrial Average respectively.”

The Target Rock analysis screened the 48 components of the Target Rock Composite Utility Index based on six rigorous criteria, identifying those utilities with strong overall sustainability practices, attractive yields, high levels of dividend safety relative to the company’s business mix and risk profile, room for at least rate-of-inflation dividend growth while maintaining or improving coverage ratios, solid total return potential with limited downside risk, and a proven long-term commitment to dividends.

“Earlier in 2012 we showed that the stocks of utilities that were leaders in social and environmental responsibility outperformed other utilities over the long run. Now we have identified five utilities that not only show exemplary sustainability performance, but also offer above average dividend yields and upside price potential,” said Richard Rudden, Target Rock’s Chief Executive. “Not a bad combination.”

The results of Target Rock’s analysis are contained in a Research Note titled “Top 5 Sustainable Utility Dividends: Yield, Safety and Upside” posted on the company’s website, http://www.targetrockadvisors.com/research-reports/.

About Target Rock

Target Rock is dedicated to the rigorous study and implementation of sustainability policies and practices within the utility and financial industries. The Company’s mission is to provide data, information, analytical systems and deep sector-specific technical expertise that identifies areas for improved performance and helps utility companies achieve their sustainability objectives with favorable social and economic outcomes. Through its partners and associates, Target Rock has over 250 years of combined experience in sustainability and executive leadership, equities and fixed income analysis, financial management, statistics and econometrics, regulatory policy analysis and management consulting.

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