More Power to Utility Stocks

For steady, albeit modest, growth and above-average dividend yields, it's still hard to top utilities.

At a home down the street from mine in a leafy Maryland suburb of Washington, D.C., work crews just installed a set of solar panels. I don’t know the homeowners, who arrived last winter and obviously plan to do less business with Pepco, our electric company, than the rest of the folks on our cul-de-sac do. We’re pleased that Pepco (symbol POM), which has an awful storm-related reliability record, is being acquired by Exelon (EXC). But should investors in Exelon worry that people in my neighborhood—or the next one over or the one after that—are galloping to get off the grid? I biked around and saw no signs of that, despite the subsidized loans and state and federal tax credits available for solar installations.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.