3 Dividend Stocks You Need to Watch in 2014

1. Exelon

Source: Exelon. 

Exelon (NYSE: EXC) ha had a tough 2013. Its stock dropped while the S&P 500 (SNPINDEX: ^GSPC) and the Dow Jones Utilities Index headed higher.

^SPX Chart

^SPX data by YCharts. 

But Exelon stock's stumble may be a buying opportunity for 2014. It's hard to argue that Exelon stock is anything but cheap. Its trailing 12 months P/E ratio clocks in at 15, and Exelon stock trades at a price-to-book value of just 1.1.

But just because Exelon stock is cheap doesn't mean it's worth it. 2014's natural gas prices will dictate the competitiveness of this nuclear stock, and it looks as if 2014 has profits in store. Natural gas prices have headed higher recently, and a variety of factors could keep gas prices pushing up even more in 2014.

2. PPL
PPL (NYSE: PPL) kept its dividend stock in the black for 2013, but a 3% gain is hardly knocking investors head over heels.

PPL Chart

PPL data by YCharts. 

But PPL's 5% dividend yield is nothing to sniff at, and its 11.9 P/E ratio and reasonable 1.5 price-to-book value makes its stock all the more affordable. With operations across the U.S. and the U.K., geographic diversity keeps this stock sheltered from a one-country crisis. Its regulated British operations account for more than half of the company's overall earnings, and PPL has beat earnings expectations for every quarter of the last three years except for third-quarter 2013.

3. Spectra Energy

Source: Spectra Energy 

If this employee owns shares of his employer, he's got a reason to smile. Spectra Energy  (NYSE: SE) and its newly formed master limited partnership Spectra Energy Partners (NYSE: SEP) were hot stocks in 2013. Shares of Spectra Energy soared while baby brother Spectra Energy Partners managed a respectable jump.

^SPX Chart

^SPX data by YCharts. 

Three things are driving Spectra's growth: transmission projects, domestic natural gas, and LNG exports.

In November, Spectra Energy completed the dropdown of all its remaining U.S. transmission, storage, and liquid assets to Spectra Energy Partners. Transmission is a lucrative business for dividend stocks, providing "toll booth" revenue that the company can pass directly to shareholders. Among its inheriting assets, Spectra Energy Partners will push ahead with a NextEra Energy  (NYSE: NEE)  partnership to build a $3 billion gas pipeline through Florida. The pipeline is the state's third major gas transmission line and will play a large role in meeting Florida's growing energy demand .

Spectra Energy has had a banner year of its own. In the month following the dropdown announcement, Spectra Energy stock soared almost 40% higher. The company continues to secure more long-term gas shipment contracts, and its location puts it in a strategic position to take advantage of developing LNG export markets in the Gulf Coast region.

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