Empire District Picked Itself Up off the Canvas in 2011

Sometimes, companies get punished through absolutely no fault of their own. Such was the case for Empire District Electric (NYSE: EDE  ) , a utility provider operating in Kansas, Oklahoma and -- most notably this year -- Missouri.

Take a look at the stock's chart this year, and you'll be able to pinpoint a major one-time event.

Any guesses as to what that one-time event was? Essentially, it was the horrendous tornado that ripped through communities like Joplin, Mo., leaving the town looking like a war zone. But if we're going to be technical, the stock dropped the most after the company announced it would be suspending its dividend for a year -- a clear effect of the twister.

Because most investors in utilities are in it for the dividends -- and have no illusions of massive share price appreciation -- this was pretty devastating news. It led the Fool's own Jim Royal to point out the safety of investing in dividend payers like Brookfield Infrastructure Partners (NYSE: BIP  ) over Empire because of their diverse holdings that aren't as susceptible to isolated catastrophes.

But in reality, not all was lost for shareholders. After bottoming out at $18.01 in May, the stock has recovered nicely, and is down less than 5% for the year. Insiders, who should have a better idea than anyone else of the company's status, snatched up shares in June after surveying the company's position.

Furthermore, the company has also let investors know that they should expect a $1.00 annual dividend starting in 2012. If that holds true, Empire's yield would be a nice 4.7% at today's prices, which is actually on-par with or better than fellow utilities Southern Company (NYSE: SO  ) , Duke Energy (NYSE: DUK  ) , and National Grid (NYSE: NGG  ) .

If investing in dividends is your kind of thing, then check out a special free report we prepared on dividend-paying companies: "Secure Your Future With 11 Rock-Solid Dividends." Inside, you'll get the scoop on 11 companies our analysts picked based on their ability to boost your retirement portfolio. Get yours today, absolutely free!

Fool contributor Brian Stoffel does not own shares in any of the companies mentioned. You can follow him on Twitter at @TMFStoffel. The Motley Fool owns shares of Brookfield Infrastructure Partners. Motley Fool newsletter services have recommended buying shares of National Grid, Brookfield Infrastructure Partners, and Southern Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On December 28, 2011, at 4:13 PM, lastfoolnameleft wrote:

    if you really believe NGG only pays 4.7%, your research may be described as either very flawed or non-existent.

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