These High-Yield Sectors Are Still Cheap

Dividends Forever
4 min readNov 20, 2023

The market has rallied off its October lows and the S&P 500 is up 4.18% in less than 30 days.

This is good for the stocks you already own.

But big rallies can be frustrating if you’re looking to add new positions. Which is why today’s article covers three investment sectors with cheap price to earnings ratios and high dividend yields.

1. Utilities

Two weeks ago, there was an electrical fire in my apartment complex and I was without power for three whole days. If you’ve never gone a day or two without electricity, you don’t realize how much time is lost simply because it’s dark outside.

Once the sun went down, there was no more reading or writing.

And I had to rely on my phone’s flashlight to do simple tasks like brushing my teeth.

I bring this up, because utility stocks are viewed as boring, low-growth investments. Yet, electricity and running water are crucial components of our modern infrastructure.

Utility stocks have taken a serious beating this year, with investors cycling out of the sector and into high-yield bonds and treasury bills.

This has left many high-quality utility stocks at or near their 52-week lows, even after the recent market rally.

Here are some utility stocks you may want to consider:

  • Black Hills Corporation ($BKH) — A power company catering to rural America. Black Hills operates in Colorado, Montana, South Dakota, and Wyoming. The stock’s starting dividend yield is 4.84%. The price to earnings ratio of 13.81. And, Black Hills has maintained 52 years of uninterrupted dividend growth.
  • Essential Utilities ($WTRG) — A water and natural gas utility with dividend growth that outpaces inflation. Essential Utilities has a 5-year compound annual dividend growth rate of 6.99%. With a price to earnings ratio of 19.05 and 3.45% starting dividend yield, this is a relatively inexpensive compounder.
  • Northwest Natural Holding Company ($NWN) — Slow dividend growth, but rapid business expansion. Northwest Natural Holding Company has recently expanded from only being a natural gas utility into being a water provider and a renewable energy…

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