Our Top Pick Among the Utilities

Here's a pop quiz for you: What are the yields on 10-year and 30-year US Treasury bonds? Unless you are an extremely keen observer of the bond markets, my guess is you will be shocked to learn that 10-year US Treasuries now yield only 1.80% and 30-year Treasuries are yielding a paltry 2.9%. Just think of it, if you want a supposedly risk-free investment, the highest rate available is under 3%, and to get it you have to tie up your money for 30 years and pay taxes on the income.

Southern Company (SO) is one of the country's biggest and best run utilities. You might call it the Sunbelt's power company because it serves most of the southern half of the United States east of the Mississippi River. This is key to it long-term prospects. It is well-know that the Sunbelt climate is popular with both people and businesses. There has been a steady migration of both into the region for the last 30 years. We believe one of the first places investors will look as they move away from bonds is at utilities. Utilities offer high dividend yields, dividend growth, some governmental protection, and provide a service that is essential to our way of life.

Source: Rising Dividend Investing

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