5% Yield? 5% Dividend Growth? And A Low PE Ratio?

Investors Are Fleeing This Sector, Creating A High-Yield Opportunity

May 14, 2025

So I actually had plans to write about a different stock today. Then, the trade war got called off, markets rallied, and Wall Street dumped their “safe haven” investments.

Recession off, risk on.

And because of this, utility stocks are actually down right now while everything else rallies.

The York Water Company, as one example, was trading for $35.07 on May 6th. Now it’s down to $31.66. Essential Utilities had a big rally into the $40 range when Wall Street was panicking. And at the time of writing, Essential Utilities is now trading for $36.61 per share.

Black Hills Corporation, a Dividend King with 53 years of continuous dividend growth, was over $61 per share during the trade war. And now, the company is down to around $57.

Which leads into today’s stock…

Portland General Electric Company $POR ( ▲ 0.92% ) .

This is a utility provider that’s been in business for 137 years. And while the company’s total returns have been “anemic” (if we’re being generous) over the past decade, Portland General Electric Company pays a high starting yield while consistently hiking its payouts by around 5% every year.

The company is currently valued at a cheap price to earnings ratio, and shares are trading at a multi-month low.

Here’s a rundown of the company’s fundamentals…

Portland General Electric Company ($POR)

Portland General Electric Company provides power to approximately 1,900,000 total customers (943,944 retail, 829,721 residential, 113,942 commercial) across 51 cities in the state of Oregon.

The firm runs a variety of thermal, hydro, and renewable power plants.

And, Portland General Electric Company has an average annual revenue of $1,695 per residential customer.

Portland General Electric Company has raised their dividend every year for the past 18 years. And, the firm recently hiked their payout by ~5% on April 20th. This gives the stock a forward annual dividend of $2.10. At the current share price of $40.63, Portland General Electric Company is offering a 5.04% starting yield.

  • Forward PE ratio of 12.85

  • 5.04% starting dividend yield

  • 5-year dividend CAGR of 5.37%

  • Payout ratio of 69.93%

  • 10-year average annual total return of 5.44%

You need an average annual total return of 7.2% per year to double your money within 10 years. And Portland General Electric Company currently fails to meet this threshold.

That said, Portland General Electric Company was trading above $45 per share back in March of this year. Additionally, the stock was selling for over $49 per share back in September, 2024.

A rebound to $45 would provide Portland General Electric Company shareholders with a 10.75% gain - excluding dividends. So there is potential for capital appreciation here.

With Portland General Electric Company’s current yield exceeding 5%, coupled with the 5% compound annual dividend growth rate, I’m buying this stock. I don’t give stock recommendations or “hot tips,” and you should always do your own research. But for me, a 5% starting dividend and a 5% annual dividend growth rate is nothing to scoff at.

This isn’t a particularly exciting business. But, Portland General Electric Company provides steady dividend income with consistent dividend growth.

And in a market where everything is rallying, this stock remains cheap.

Next report is on regional banks. No more utility stocks, I promise!

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.