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What Do Dividend Stocks, Coal, and Cameroon Have in Common?

It's not exactly the Tony Awards, but the winners of the 2013 Edison Electrical Institute awards have been announced, marking another year of leadership, innovation, and progress for shareholder-owned utilities everywhere. And while none of these dividend stocks felt a 100% surge in share prices today, awards can serve as a unique signaling effect for corporations that are leaving their competitors in the dust. Let's see why these dividend stocks could be a cut above the rest.

Can coal still kick it?
Heading into June, AEP (NYSE: AEP  ) was in close competition with NextEra Energy (NYSE: NEE  ) as Edison Award finalists. NextEra added an enormous 1,500 MW of new wind commissions in 2012, putting its total wind capacity at 10,000 MW. The utility also received kudos for completion of a multi-year, multi-site, multi-billion-dollar nuclear uprate project that topped 400 MW expectations by a smooth 100 MW.

But while NextEra made the finals, it ultimately got the nudge. AEP finished first due primarily to its completion of the first "advanced ultra-supercritical steam cycle" coal-fired power plant. The $1.7 billion, 600 MW plant now serves as a principal source of baseload energy for Louisiana, Arkansas, and Texas.


While the facility boasts a record 39% efficiency for low-sulfur coal, the utility's bureaucratic battles may have been its most impressive feat. AEP had to navigate seven years of "construction, scheduling, and legal and regulatory challenges" to put its new power plant on the map.

AEP's not the only company to give coal another chance. Duke Energy (NYSE: DUK  ) announced today that its 618 MW Edwardsport "advanced technology coal gasification" plant is officially operational. According to Duke, the plant is "one of the world's cleanest coal-fired power generating facilities," and will replace about 500 MW of coal power that didn't make the environmental cut.

Congrats to Cameroon
AES (NYSE: AES  ) may be pulling back on its international exposure, but the Edison Electrical Institute lauded the utility for its work in Cameroon over the past 12 years. AES began Cameroon operations in 2001 and has managed to greatly increase access to reliable electricity while providing jobs and social programs.

"We are really proud to receive this award," said COO Andrew Vesey in a statement. "The company's overall contribution to the advancement of the country's power sector has enabled us to achieve extraordinary results, driven by a strong strategic vision and relentless efforts by the AES-SONEL [AES' subsidiary] team to execute the plan. Our contribution to the renewal of the power sector of the country is also a great example of our successful public-private partnership with the Government of Cameroon."

The utility has invested around $1 billion over the past 10 years, and has extended electricity access to about 60,000 new families each year. According to the company's latest annual report, AES is the only electricity provider in Cameroon, with 1,238 MW of generation comprised of 58% hydroelectricity, 17% gas, 16% heavy fuel oil, and 9% diesel.

Foolish bottom line
Neither AEP nor AES have seen record profits this year, but their dividend stocks' respective 7.5% and 14.6% returns have both exceeded industry averages. 

AEP Chart

AEP data by YCharts

Awards are no substitute for careful company analysis, but investors can use this information as an indication of corporations willing to think outside the box. Whether utilizing new technology or investing where no other utility intends to go, AEP and AES are dividend stocks worthy of a lengthy look.

While these two utilities offer uniquely innovative investment opportunities, there's a lot to be said for sticking with what works. 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 if 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.

Read/Post Comments (1) | Recommend This Article (1)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 19, 2014, at 2:00 PM, PaulAceCameroon wrote:

    60% of Cameroon is unexplored. ACE International is a Cameroon country available for partnerships and co-ventures. For Big Deals: We can partner with you, providing the 35% local ownership needed to form a mine, explore for minerals, exploit, drill for oil, mine iron, and more. Email us your proposal.

    ACE International Trading Company S.A. is based in Limbe, Cameroon. Douala is the airport to fly into. Currently we trade internationally in Gold Bullion; and a bauxite mine in development. If there's cashflow in your proposal, we're interested.

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