By J.R. Robinson 

A couple of weeks ago, a reporter for U.S. News & World Report contacted me for comment on Utility stocks in the current investment environment.  Although the subsequent article he wrote was not about rising dividend companies per se, I offered up a few examples of companies that might be suitable additions to a direct indexing dividend stock portfolio as a source of current passive income that may rise over time at a pace that is faster than the cost of living index. Here is a link to the article:

8 Best Utility Stocks to Buy For Dividends (US. News & World Report, May 10, 2023)

In the interview, I shared my three primary quantitative screening criteria – dividend payout ratio of less than 70% (for utilities only), P/E multiple less than 20 times forward earnings, and trailing 5-year dividend growth rate of at least 5%.  The author of the article did not accurately explain this. 

He also referenced me as a co-founder of Nest Egg Guru (my software company), instead of as the founder of Financial Planning Hawaii and Fee-Only Hawaii.  Oh well, he must have been on a deadline. The bottom line is that utility stocks can be a good source of tax-favored income that may help investors keep ahead of the cost of living over time.  I include utilities that meet my screening criteria in nearly every rising dividend stock portfolio I construct.

Note:  My comments in the article were in response to the reporter’s query. They are general in nature.  My comments in the article are not intended as specific recommendations to invest and should not be construed as such.