3. Huaneng Power International (HNP - Get Report)Yield: 5%
Huaneng Power International builds and operates power plants in China. The company benefits from China's nearly insatiable appetite for energy. Huaneng currently operates 175 power plants across 18 Chinese provinces and is one of the country's main power producers, with controlled generation capacity of 54,402 Megawatts.Huaneng's operating revenue improved 25% year-over-year in the first-quarter of 2011. Power generation in China increased 29%. In early April, Huaneng raised its power tariff in 11 Chinese provinces, which should boost revenue. The company also plans to boost clean energy generation to 25% of total installed capacity in the next five years, which will limit exposure to rising coal prices. Huangeng's $1.22 annualized dividend represents a payout of less than 15% of cash flow. At the recent $23 price, shares yield about 5.2%. Also important, Huaneng shares trade below book value and at a multiple of only 5.8 times last year's cash flow, which is well below the S&P's multiple of 9.3. StreetAuthority's Tim Begany recently projected a long-term upside of 100% or more for Huangeng. To read his article, click here.