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It's been another busy week for utilities, with new highs as dividend stocks (and their dividends) soar and shrink. Here's what you need to know to keep pulling profits for your portfolio.
Let's get high
Ameren (NYSE: AEE ) , PPL (NYSE: PPL ) , and several other utilities all recently hit 52-week highs as stocks soared. Utilities in general have been on the rise in 2013, but a common thread among these companies is their stability. They're heavy on the regulated side, and in times of economic volatility, there's nothing income investors like more than a stable dividend stock.
It's the circle of dividends
Atlantic Power (NYSE: AT ) distributed its first newly downsized dividend this week. The utility first announced that it would cut its dividend by 66% during its Q4 2012 earnings report, and its stock has been sliding ever since. With its new dividend in place and a plan to focus on natural gas and renewables, I'll be keeping a close eye on Atlantic's activity over the next few months.
On the other side of dividend stocks, Southern (NYSE: SO ) announced a 3.6% increase in its dividend, effective June 6. This news comes as little surprise to Southern shareholders, since it's the 12th straight year that the utility has upped its dividend. This news also marks the 262nd consecutive quarter Southern has distributed a dividend to shareholders. Looking ahead, the company's coal-heavy portfolio could benefit in the short term from higher natural gas prices, but it'll need to continue its modernization projects to stay cost-competitive and keep its status as a sustainable dividend stock.
After five years of work and billions of dollars spent, NextEra Energy (NYSE: NEE ) completed its nuclear modernization project this week. In an unsuspected turn of events, the uprates exceeded expectations, as NextEra had previously estimated a 400 megawatt improvement.
The utility relies on nuclear power for around 16% of its total generation capacity, and these newest upgrades add an additional 500 MW to its energy portfolio. According to the company, the project will increase efficiency savings by $100 million in the next year alone.
Stay current on electricity
The world of utilities is changing fast, and dividend stocks aren't the stable stalwarts they once were. Be sure to check back weekly for the latest on your portfolio's moves, and you'll be well on your way to electrifying earnings.
As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine whether Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.