There are concerns about rising inflation. Recently, post the Federal Open Market Committee meeting, the Fed also hinted that its stance in relation to inflation might be changing. While those comments led to a bit of a crash in markets around the world, rising inflation can be a positive factor for value stocks. Among value, stocks are utility companies. They have low growth rates but are very stable. Their business is predictable. Population growth and migration tend to be the growth drivers for utility stocks. However, dividend payments are a big reason why investors may be looking for utilities stock to buy 2021. Income investors and income-generating portfolios tend to have utility stocks for the cash flow and stability that they provide. One leading utility company in the New Jersey area is Public Service Enterprise Group.
Numbers Of Public Service Enterprise Group
If we look at the past decade, Public Service Enterprise Group has actually seen its revenues fall from around $11 billion in 2011 to $9.6 billion in 2020. However, the gross margin has been remarkably steady at around 35% for the most part. Net income has risen from $1.5 billion to $1.9 billion over a 10-year period. Earnings per share have gone from $2.96 in 2011 to $3.76 in 2020. The dividend per share has also increased from $1.37 in 2011 to $1.96 in 2020. The payout ratio had generally remained below 60% except in 2019 when it went to 65%. A conservative payout ratio not only indicates the sustainability of future dividend payments but also leaves some cash for capital expenditure and upgrades. If you are looking for stable and conservative utility company stocks, then Public Service Enterprise Group might be worth analyzing further.
Public Service Enterprise Group’s stock has risen by around 40% over the past five years. The stock did witness a 35% drop in the March 2020 market crash, but utility stocks crashed much less than some small caps and growth stocks.