While many investors are opting for safety at any cost, there is an army of retirees and near-retirees that are depending upon income from their life savings in order to live, and these investors are being forced to look elsewhere in predictable dividend stocks and other instruments that they feel are low in risk. Utility stocks have accidentally become the new CDs and bonds for investors due to their safety, suitability and high dividends.

Generally speaking, utilities have fairly predictable earnings and they pay out a substantial portion of their income as dividends. Some utilities now pay dividends that yield more than 4% to investors. The power companies often have local competition in their local markets now due to deregulation and the ongoing regulatory pressure of carbon emissions is actually keeping a lid on some of the upside that might otherwise be there. The trick is for investors to find the utilities where the dividend is safe even if these companies are forced to spend the collective billions due to new environmental areas.

Utilities have not been immune to the market pressure this week, but the reality is that the sector was within about 2% or 3% of the yearly highs as recently as last Friday. A 5% sell-off in the past two days may be an opportunity for those investors with long-term outlooks. The utility sector appeals to many investors looking for income, value, predictable growth, and they also classify as defensive stocks. Investors used to look for the highest yielding CDs from insured banks and savings & loans, but now that opportunity is only found in utilities.

We have compiled a list of the key liquid exchange-traded funds and a closed-end funds for investors who want diversification. We have also screened out three of the top electric utility stocks for retail investors that offer the following minimum criteria: $5 billion in market value, a 4% or higher yield, not trading at a 52-week high but also not down more than 10% from the highs (avoiding the troubled players) and which also have 10% or more upside to the consensus analyst price targets from Thomson Reuters. Lastly, we have our top water utility in America that is slightly outside of the normal utility parameters for the power generation and electric utility companies.

In ETFs and Funds, we have highlighted the Utilities Select Sector SPDR (NYSE: XLU), iShares Dow Jones US Utilities (NYSE: IDU) and the Reaves Utility Income Fund (AMEX: UTG). In utility and generation companies we have identified American Electric Power Company (NYSE: AEP), FirstEnergy Corporation (NYSE: FE) and PP&L Corporation (NYSE: PPL). In the water utility sector, we have discussed American Water Works Company, Inc. (NNYSE: AWK). What matters most here is the current situation and opportunity on each. As we always stress: understand what you are investing in!

Calpine Corporation (NYSE: CPN) Raised to Buy at BofA/ML.
Computer Sciences Corporation (NYSE: CSC) Cut to Sell at Goldman Sachs.
Duke Energy Corporation (NYSE: DUK) Raised to Neutral at Goldman Sachs.
Exelon Corporation (NYSE: EXC) Raised to Buy at BofA/ML.
FirstEnergy Corporation (NYSE: FE) Raised to Buy at BofA/ML.
General Electric Co. (NYSE: GE) Maintained Outperform but cut estimates at Credit Suisse.
Intuit Inc. (NASDAQ: INTU) Raised to Buy at UBS.
McDonald’s Corporation (NYSE: MCD) Reiterated Outperform and raised target to $97 at Credit Suisse.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Reiterated Buy and raised target to $18 at BofA/ML.
Motorola Solutions Inc. (NYSE: MSI) Raised to Buy at Jefferies.
Pandora Media, Inc. (NYSE: P) Started as Overweight at JPMorgan; Started as Outperform at Wells Fargo; Started as Outperform at William Blair; Started as Buy at Citigroup.
Pan American Silver Corp. (NASDAQ: PAAS) Cut to Hold at Canaccord Genuity.
Pepsico Inc. (NYSE: PEP) Cut to Neutral at Goldman Sachs.
The Travelers Companies (NYSE: TRV) Maintained Underperform as Bear of the Day at Bear of the Day
VAALCO Energy, Inc. (NYSE: EGY) Reiterated Buy as Value at Zacks.
Watson Pharmaceuticals (NYSE: WPI) Raised to Outperform as Bull of the Day at Zacks.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Some of the more recent dividend hikes in the utility sector have been in shares of Duke Energy Corporation (NYSE: DUK), American Water Works Company, Inc. (NYSE: AWK), American States Water Company (NYSE: AWR), Xcel Energy Inc. (NYSE: XEL), and DTE Energy Co. (NYSE: DTE).  What we are trying to show you is that the trend of dividend hikes is not without precedent in utilities.

24/7 Wall St. is looking for utility dividend hike candidates after some recent hikes in the sector.  We have evaluated 9 large-cap or mid-cap dividend producing utility stocks for investors where you can expect a dividend hike in the coming months.  These include, in alphabetic order: American Electric Power Co., Inc. (NYSE: AEP), Constellation Energy Group, Inc. (NYSE: CEG), Dominion Resources, Inc. (NYSE: D), Entergy Corporation (NYSE: ETR), FirstEnergy Corp. (NYSE: FE), NextEra Energy, Inc. (NYSE: NEE), Pinnacle West Capital Corporation (NYSE: PNW), PPL Corporation (NYSE: PPL), and Progress Energy Inc. (NYSE: PGN).

Now that the Supreme Court has rejected some carbon-cutting measures, some additional drag has been removed from this sector that might have otherwise been victim to higher ten-year Treasury yields.  We would also like to note that we have tried to consider mergers in our analysis as this sector continues to consolidate.  Our basis is more of a standalone merger basis rather than solely due to mergers  into consideration here because we are looking for the companies which can grow their dividends based solely upon their own metrics.

American Electric Power Co., Inc. (NYSE: AEP) is perhaps our favorite utility and it was named as one of our ten stocks to own for the next decade.  Its shares recently traded at $38.18 and has a current dividend yield of 4.9%.  Its 52-week trading range is $30.34 to $38.99.  Thomson Reuters has estimates of $3.13 EPS for 2011 and $3.22 EPS for 2012.  AEP has had three straight quarters of a $0.46 dividend and this is likely to be grown in the months ahead.  The prior $0.42 quarterly dividend was only in place for two quarters before being raised.  The current pace comes to $1.84 per year.  Our take, look for $0.48 per quarter.  We are not looking for an equal hike this time around as earnings growth is only expected to be almost 3% next year.

Constellation Energy Group, Inc. (NYSE: CEG) is often treated as a controversial stock in the world of utilities.  While we said we are not taking M&A into consideration, it is in a pending deal with Excelon and we are still evaluating this on a standalone basis.  It recently traded at $37.70 and has a current dividend yield of 2.55%.  Its 52-week trading range is $27.24 to $37.87.  Thomson Reuters has estimates of $3.20 EPS for 2011 and $2.46 EPS for 2012.  Its dividend used to be far higher and has been $0.24 per quarter for about ten quarters in a row.  It is hard to know about the “when” but the “if” seems a shoe-in if it somehow is not merged.

Dominion Resources, Inc. (NYSE: D) recently traded at $48.61 and has a current dividend yield of almost 4.1%.  Its 52-week trading range is $36.98 to $49.07.  Thomson Reuters has estimates of $3.14 EPS for 2011 and $3.25 EPS for 2012.  The company has been in the habit of hiking payouts more than once a year if the last hike was a sign.  If no dividend hike is made in the fall, it could be announced late this year.  The current payout is $1.97 per year, leaving well more than $1.00 per share for operations ahead.

The ETFs include Utilities Select Sector SPDR (NYSE: XLU), iShares Dow Jones US Utilities (NYSE: IDU), Rydex S&P Equal Weight Utilities (NYSE: RYU), and Ulta Utilities ProShares (NYSE: UPW). The closed-end funds we looked at include Cohen & Steers Utility Fund Inc. (NYSE: UTF), Reaves Utility Income Fund (AMEX: UTG), Wells Fargo Advantage Utilities and High Income Fund (AMEX: ERH), and DNP Select Income Fund, Inc. (NYSE: DNP). The mutual funds we looked included Invesco Utilities Investor (FSTUX), Rydex Utilities (RYAUX), and Franklin Utilities A (FKUTX).

The utilities sector posts a price/earnings ratio of 18.50, higher than the tech, financial, conglomerates, and materials sectors. The sector’s return on equity is the lowest of all but the financial sector, but its dividend yield of 3.94% is higher than any other sector.

Utilities Select Sector SPDR (NYSE: XLU) holds net assets of $4.33 billion and it’s year-to-date return is 6.81%, while its yield is 3.94%. XLU’s three largest holdings are Southern Company (NYSE: SO) at 8.32.% of assets, Exelon Corp. (NYSE: EXC), and Dominion Resources, Inc. (NYSE: D). The fund’s 52-week range is $27.92-$34.30, and it closed last week at $33.19. Shares are up about 18% in the past 12 months and about 19% from the annual low.

iShares Dow Jones US Utilities (NYSE: IDU) claims net assets of $511 million and its year-to-date return is 7.94%, while its yield is 3.57%. It’s three largest holdings are also Southern Company (6.39%), Exelon, and Dominion. The fund’s 52-week range is $67.94-$84.54, and it closed last week at $81.85. Shares are up nearly 20% in the past 12 months, and about the same from the annual low.

Rydex S&P Equal Weight Utilities (NYSE: RYU) has net assets of $24.5 million, and its year-to-date return is 7.48%, while its yield is 3.27%. Its top three holdings are Constellation Energy Group, Inc. (NYSE: CEG), which is being acquired by Exelon, at 2.7% of total assets, NRG Energy, Inc. (NYSE: NRG), and NiSource Inc. (NYSE: NI). RYU also includes some communications stocks, such as MetroPCS Communications, Inc. (NYSE: PCS) and Verizon Communications (NYSE: VZ). As its name would lead you to believe, its tenth-largest holding accounts for 2.54% of total assets. The fund’s 52-week range is $43.51-$56.28, and it closed last week at $54.47. Shares are up about 24% in the past 12 months and about 25% from the annual low.

ProShares Ultra Utilities (NYSE: UPW) has net assets of $14.45 million, and its year-to-date return is 15.65%, while its yield is 2.32%. Its top three holdings are Southern Company at 5.62%, Exelon, and NextEra Energy, Inc. (NYSE: NEE). The fund’s 52-week range is $32.19-$50.52, and it closed last week at $47.37. Shares are up about 45% in the past 12 months and about 47% from the annual low.

Our daily “Dividend Watch” does not always look for the highest dividends on an absolute basis, but we look for either the most stable dividends or those which can be raised easily through time and we generally look for the companies large enough with a core market that can stand better through time than smaller peers.  What we like about the electric utilities today is that these offer high income and they are defensive stocks in nature.  Simultaneously, they do offer some growth, yet also offer value investors plenty of value. Another worry might be the build-out of the power grid that has continually been an argument, but that and the commodity worry must be a combined non-starter… Many utility shares are hitting 52-week highs.

American Electric Power Co., Inc. (NYSE: AEP) trades around $37.00 and its 52-week trading range is $28.26 to $37.94.  It has a market cap of almost $18 billion and pays investors right at 5.0% in dividend yields.  We would warn against expecting another immediate dividend hike as it raised its $0.41 dividend that had been static from November-2007 to February-2010, but then it raised it to $0.42 for two quarters and then to $0.46 for the last two.  AEP has been diversifying its portfolio of electric power sources with more renewables to its 5+ million customers in 11 states.  The current annualized payout of $1.84 compares to Thomson Reuters estimates of $3.13 EPS for 2011 and $3.24 EPS for 2012.  Based upon this, we’d expect that dividend raise to go to $0.47 or $0.48 per quarter at the next dividend hike.  Analysts have a consensus price target objective here of $38.75, although we would expect some to lift targets if that is achieved.

Duke Energy Corporation (NYSE: DUK) is one which many investors had looked the other way on after its 2007 spin-off of Spectra.  What is interesting is that it raised its dividend through the recession and its $0.245 payout may be up for being raised again soon. Shares just hit a new 52-week high of $19.00 today and it has a market cap of about $25 billion.  It also pays investors close to a 5.2% yield.  The company just reported a 15% rise in net income and it is in the midst of the merger with Progress Energy, Inc. (NYSE: PGN).  This deal is going to transform Duke, but Progress also has a yield of close to 5.2%.  The company claims to only be spending $90 million for the first integration, which means that a profit boost may be able to flow immediately to the bottom line.

FirstEnergy Corporation (NYSE: FE) is in the news this morning because of a blowout earnings report, or at least on guidance.  Shares are up 5% at $41.65 but the stock hit a new 52-week high of $41.77 against a low of $33.57.  It also has a market cap of about $12.7 billion and it pays investors about 5.3% in dividend yields even at the highs today.  What makes First Energy so interesting is that it is only about half of its pre-recession share price peak and its $0.55 per quarter dividend has been static since early 2008.  The company earned only $0.15 for the quarter, but that would have been $0.69 EPS had it not been for the shares issued for the acquisition of Allegheny and due to higher operation and maintenance costs.  This $2.20 payout compares to raised guidance of adjusted earnings per share of $3.20 to $3.50 for 2011 through 2013. We are not looking for a big dividend increase immediately, but 5.3% should entice investors looking for ‘coupon income’ in stocks.

For those who want to smooth out the noise of individual companies and still get a handsome dividend, there is always the Utilities Select Sector SPDR (NYSE: XLU).  We evaluate this because the rise in commodities would be punishing it if there was going to be a blow-up in the utility sector’s earnings.  Shares are at $33.52 and it hit a new 52-week high of $33.56 today.  As this is a fund (ETF), it has a variable quarterly payout but the average of the payouts comes to a yield of roughly 4.0% for investors.

If you want to know just how committed utilities are to dividends, American Electric Power and Duke are in a consortium called Defend My Dividend, which aims to lobby Congress not to boost the dividend tax all over again as it did in the past.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

To show just how bad the market has been even to utilities, the leading ETF is the Utilities Select Sector SPDR (NYSE: XLU) and its shares have fallen 4.6% since Friday closing Wednesday at $30.99 with a 52-week range of $25.76 to $32.89.  We did of course not cover every single utility with nuclear power, but our coverage below accounts for a combined market capitalization rate of more than $100 billion.  Our review focused on Ameren Corporation (NYSE: AEE), Constellation Energy Group, Inc. (NYSE: CEG), Entergy Corporation (NYSE: ETR), Exelon Corporation (NYSE: EXC), FirstEnergy Corp. (NYSE: FE), Progress Energy Inc. (NYSE: PGN) and Southern Company (NYSE: SO).

We broke out how much each of the partial US nuclear energy complex has fallen since Friday, what the 52-week range is, what the market caps are, and which are some of the listed nuclear properties which we took from the U.S. Nuclear Energy Institute.

Ameren Corporation (NYSE: AEE) is down only about 3.5% since Friday with shares at $26.79; 52-week range is $23.09 to $29.89 and its market cap is $6.4 billion. Nuclear properties include Callaway.

Constellation Energy Group, Inc. (NYSE: CEG) is down about 6% since Friday with shares at $30.30; 52-week trading range is $27.64 to $38.73 and its market cap is roughly $6 billion.  Nuclear properties include Calvert Cliffs, Ginna, and Nine Mile Point.

Entergy Corporation (NYSE: ETR) is down almost 9.5% since Friday with shares at $66.65; its 52-week trading range is $66.31 (hit today) to $84.33 and its market cap is about $12 billion.  Nuclear properties include Arkansas Nuke 1 & 2, Grand Gulf, Indian Point, James A. Fitzpatrick, Palisades, and River Bend.

Exelon Corporation (NYSE: EXC) is down almost 7% since Friday with shares at $39.95; its 52-week trading range is $16.78 to $45.56 and its market cap is $26.5 billion. Nuclear properties include Braidwood, Bryon, Clinton, Dresden, La Salle, Limerick, Oyster Creek, Peach Bottom, Quad Cities, Salem, and Three Mile Island.

FirstEnergy Corp. (NYSE: FE) down almost 6% since Friday with shares at $36.59; 52-week range is $33.57 to $40.80 and its market cap is $11.2 billion.  Nuclear properties include Beaver Valley and Perry.

Progress Energy Inc. (NYSE: PGN) is down ‘only’ almost 4% since Friday with shares at $44.55; 52-week trading range is $37.13 to $46.83 and the market cap is about $13.1 billion.  Nuclear properties include Brunswick, Crystal River, H.B. Robinson, and Shearon Harris.

Southern Company (NYSE: SO) is down close to 4% since Friday with shares at $36.80; 52-week range is $32.04 to $38.79 and its market cap is close to $31 billion.  Nuclear properties include E.I. Hatch, J.M. Farley and Vogtle.

Many of these plants have switch-over capabilities, but there is one thing to consider here.  Despite these plants being old, shutting these plants down in any short order is just not likely in the cards barring maintenance or other disasters.  Switching to fossil fuels is also a much more costly initiative for consumers.

What seems to be at issue is that newer regulations would come with a higher cost of securing and operating “safe nukes” if there is such a real term.  Our take is that nuclear expenses will rise as a result, but the future demand damage of uranium may make the fuel cheaper ahead and any higher regulatory and security costs that the plants take on will probably be passed down to Joe America.

JON C. OGG

We have provided the expected events, added in background and price data, added in color on each where applicable, and more.

Alcoa, Inc. (NYSE: AA) kicks off earnings Monday after the close and Thomson Reuters has earnings estimates of $0.19 EPS on $5.68 billion in revenues.  Be advised that at $16.42 its 52-week range is $9.81 to $17.60 and also know that this was around $12.00 before its October earnings.

Apollo Group Inc. (NASDAQ: APOL) is also due to report earnings Monday after the close.  It finds itself between the days of former growth and regulation out the (you know what)… It cannot be a value stock even if the numbers today suggest so.  The  regulation affecting forward business throws too many variables into the mix.  Thomson Reuters has estimates of $1.35 EPS and $1.26 billion in revenues.  At $37.98, its 52-week trading range is $33,75 to $66.69.

Duke Energy Corporation (NYSE: DUK) with a $23.5+ billion market cap is reported by the WSJ to be acquiring Progress Energy Inc. (NYSE: PGN) with its $13.1 billion market cap.  The WSJ homepage notes: “Duke Energy is close to a deal to buy Progress Energy in an all-stock merger that would value its smaller rival at more than $13 billion.”

Endo Pharmaceuticals (NASDAQ: ENDP) announced late Friday night that it received a complete response letter from the FDA on the application of its new formulation of OPANA® ER designed to be crush resistant.  Endo noted that this does NOT need those additional clinical studies be conducted for approval of the NDA, but noted that it currently anticipates responding to the FDA by mid-2011 and would expect a six-month review cycle once its response is filed.  The new formulation of OPANA ER is for moderate to severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time.

American Electric Power Co., Inc. (NYSE: AEP) Cut to Neutral at Goldman Sachs.
Barnes & Noble, Inc. (NYSE: BKS) Raised to Neutral at Goldman Sachs.
Bed Bath & Beyond, Inc. (NASDAQ: BBBY) Started as Buy at Jefferies.
BP plc (NYSE: BP) Started at Market Perform at Bernstein; Reiterated Overweight at JPMorgan.
Caterpillar Inc. (NYSE: CAT) Started as Outperform at Raymond James.
Dendreon Corp. (NASDAQ: DNDN) Reiterated Buy at Needham.
The Dow Chemical Company (NYSE: DOW) Cut to Neutral at Goldman Sachs.
Emulex Inc. (NYSE: ELX) Cut to Hold at Jefferies.
Eli Lilly & Co. (NYSE: LLY) Cut to Hold at Jefferies.
First Energy Corp. (NYSE: FE) Cut to Market Perform at FBR.
Leap Wireless International Inc. (NASDAQ: LEAP) Raised to Buy at Auriga; Cut to Neutral at SunTrust.
MetLife, Inc. (NYSE: MET) Raised to Buy at BofA/Merrill Lynch.
priceline.com Inc. (NASDAQ: PCLN) Raised to Buy at Stifel Nicolaus.
Sequenom Inc. (NASDAQ: SQNM) Raised to Buy at Soleil.
Solarfun Power Holdings Co. Ltd. (NASDAQ: SOLF) Raised to Buy at Jefferies.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Affymetrix Inc. (NASDAQ: AFFX) Cut to Underweight at Piper Jaffray.
The Andersons, Inc. (NASDAQ: ANDE) Raised to Buy and $41 target at BB&T.
Charm Communications Inc. (NASDAQ: CHRM) Started as Outperform at Credit Suisse.
FirstEnergy Corp. (NYSE: FE) Cut to Hold at Citigroup.
The Mosaic Company (NYSE: MOS) Maintained Hold but Target cut to $45 from $57 at Soleil.
OpenTable, Inc. (NASDAQ: OPEN) Cut to Hold at Citigroup.
Potash Corp. of Saskatchewan (NYSE: POT) Maintained Hold but Target cut to $89 from $100 at Soleil.
ProLogis (NYSE: PLD) Raised to Market Perform at Wells Fargo.
Public Service Enterprise Group, Inc. (NYSE: PEG) Added to Conviction Buy List at Goldman Sachs.
QuinStreet, Inc. (NASDAQ: QNST) Raised to Overweight at Thomas Weisel.
Wimm-Bill-Dann (NYSE: WBD) Added to Focus Sell List at Goldman Sachs.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

We wanted to take a look at Select Sector SPDR Trust (NYSE: XLU), Southern Company (NYSE: SO), Dominion Resources, Inc. (NYSE: D), Duke Energy Corporation (NYSE: DUK), FPL Group, Inc. (NYSE: FPL), American Electric Power Company (NYSE: AEP), Entergy Corporation (NYSE: ETR), FirstEnergy Corporation (NYSE: FE), Edison International (NYSE: EIX), Progress Energy Inc. (NYSE: PGN), PP&L Corporation (NYSE: PPL), Xcel Energy Inc. (NYSE: XEL), DTE Energy Company (NYSE: DTE) and more.

There may actually be some time for them to shine in the near future. Despite the rally market of the last month, almost none of these stocks are within 5% of their 52-week highs.  We showed the dividend yields implied here, although as with all ‘yields’ there is often some distortion.  What we did not show was a P/E ratio because of the lagging effect of that, but we did show was the closing price for March 31 as the quarter closed and compared that to the 52-week trading range and compared it to the average consensus price target from Wall Street analysts per Thomson Reuters.

So why is this sector in the spotlight?  The dividend yields should be attractive enough.  Most are 4% and higher.  This offers defensive stock positioning, dividend yields, and the hope for some upside.  Of course, some are barren of a dividend due to issues and turnarounds. That keeps investors from having to go out to REITs and take on all the risks there associated with land values and trends.  Historically, utilities have been largely considered defensive stocks in hard times.  Morningstar noted in its quarterly wrap-up, “Utility stocks were hurt in the quarter by falling commodity and energy prices, bearish earnings outlooks as firms reported earnings, and a generally negative view of the future of electricity demand.”  The problem with that call is that energy demand is not dropping any longer and some larger companies are starting to increase their power usage again.