NEW YORK ( TheStreet) -- Covanta Holding ( CVA), PPL Corporation ( PPL), Exelon ( EXC) and DTE Energy ( DTE)are a few utility stocks which are defensive bets and have high dividend yields ranging from 4.8%-8.7%.

Some of these 10 stocks have underperformed the Dow Jones and the S&P 500 index that gained 6.3% and 4.9% during the past three months, respectively. This growth came despite inflationary concerns, unrest sweeping across the Middle East and the catastrophic events that rocked Japan recently. The U.S. markets seem to have shrugged off these happenings and continue to rise on the back of positive employment and capital spending data.

Last month, J. P. Morgan cut its world growth forecast to 3.7% for the first half of 2011 owing to "near-term uncertainty" after Japan's devastating earthquake. Other concerns include rising oil prices and food price spikes, among others. J. P. Morgan also trimmed its first-half U.S. output growth to 3% from 4%.

We have identified a few defensive stocks to combat a decline in the U.S. markets, if any. Dividend income investors demand a dividend yield of 2%-3%, similar to the dividend yield of S&P 500. These 10 stocks have dividend yield of 5%-9%, topping the index average. Also, the stocks considered here have an average upside potential of up to 17%, according to analysts' estimates.

8. DTE Energy is a diversified energy company engaged in the generation, purchase, distribution, and sale of electricity and natural gas. The company's other activities include gas pipelines and storage, unconventional gas and oil project development and production, power and industrial projects, and energy marketing and trading operations.

During 2010 fourth quarter, total revenue increased marginally to $2.17 billion from $2.12 billion, while earnings were up 26.7% to $152 million or 90 cents per share from $120 million or 72 cents per share in the year-ago quarter. Full year revenue grew 6.8% to $8.6 billion from $8 billion, while net income stood at $630 million or $3.74 per share, up 18.4% from $532 million or $3.24 per share.

During the year ended Dec. 2010, the company paid dividend of $2.18 per share, up from $2.12 per share in 2009. Totally, the company paid cash dividends of $360 million during 2010 compared to $348 million in 2009 and $344 million in 2008.

Going forward, DTE guides 2011 earnings in the range of $3.40-$3.70 per share. The company recently declared a dividend of 56 cents per share payable on Apr.15, 2011.

The company currently has a dividend yield of 4.81%. Of the 11 analysts covering the stock, 27% rate a buy, while 64% recommend a hold. The stock has gained 7.6% during the past one year and currently trades at a P/E of 13.8. Barclays recently reiterated an overweight rating on the stock with a price target of $52.

7. Exelon is a utility services holding company operating through owned and contracted electric generating facilities, wholesale energy marketing, and retail supply.

During 2010 fourth quarter, total revenue increased 8.5% to $4.5 billion from $4.1 billion, while net income stood at $631 million or 96 cents per share, up 3.4% year-over-year from $610 million or 92 cents per share. Full year revenue grew 7.1% to $18.7 billion, whereas net income declined marginally to $2.7 million or $4.06 per share from $2.72 million or $4.12 per share in 2009.

In addition, the company generated cash from operations of $5.3 billion, while it returned $1.4 billion, including quarterly dividend of 0.525 per share or $2.10 annually in cash to shareholders through dividends.

During Dec. 2010, the company completed the acquisition of John Deere Renewables, an operator and developer of 36 wind power projects in eight states, for $860 million. The deal marks Exelon's entry into operating wind projects. The company expects earnings of $3.90-$4.20 per share and cash flow from operations of $4.3 billion during 2011.

The company currently has a dividend yield of 5.08%. Of the 21 analysts covering the stock, 19% rate a buy, while 62% rate a hold. On average, analysts estimate an upside of 4.7% to $42.86 in value from current levels. The stock currently trades at a P/E of 10.1

6. PPL Corporation is an energy and utility holding company engaged in the generation of electricity from power plants in the northeastern, northwestern, and southeastern U.S. The company markets wholesale or retail energy primarily in the northeastern and northwestern regions of the U.S., delivers electricity to consumers in Pennsylvania, Kentucky, Virginia, Tennessee and the U.K. and natural gas in Kentucky.

For 2010 fourth quarter, PPL reported net income of $355 million or 73 cents per share, compared to $153 million or 40 cents per share in the year-ago quarter. Total revenue grew 8.9% to $1.9 billion from $1.7 billion on the back of a 22.9% increase in utility revenue coupled with 47.9% increase in revenue from realized wholesale energy marketing. For the full year, net income more than doubled to $938 million or $2.17 per share, compared to $407 million or $1.08 per share on revenue growth of 14.4% to $8.5 billion.

The company has completed the acquisition of Central Networks' electricity distribution business from E.ON UK plc in an all-cash transaction of $5.7 billion. Furthermore, the company declared a quarterly common stock dividend of 35 cents per share. For the full year, the company paid dividend of $1.40 per share ($566 million), compared to $1.38 per share ($517 million) during 2009.

PPL recently raised its 2011 earnings guidance to $2.50-$2.75 per share from the earlier $2.40-$2.60 per share.

The company currently has a dividend yield of 5.3%. Rated by 14 analysts, the stock has 43% buy and 57% hold. On average, analysts estimate an upside of 9.5% to $28 in value from current levels. The stock currently trades at an attractive P/E of 8.

5. Amerigas Partners ( APU) is a retail propane distributor in the U.S. serving residential, commercial, industrial, agricultural, and motor fuel customers in all the 50 states through 1,200 propane distribution locations.

During the first quarter ended Dec. 2010, total revenue increased 6.6% to $700.2 million on higher average retail sales prices, partially offset by lower retail sales volumes. However, EBITDA declined 7.9% to $113.3 million, while net income decreased 10.8% year-over-year to $74.9 million or $1.06 per share.

For the same quarter, quarterly distribution was 0.705 cents per share totaling $41.6 million compared to $39.2 million in the year-ago quarter, reflecting a higher quarterly per unit distribution rate.

For 2011, the company expects to report net income of $194 million and EBITDA of $350 million, as compared to losses reported in the previous year.

The company currently has a dividend yield of 5.7%. Of the seven analysts covering the stock, 14% rate a buy and 57% assign a hold. On average, analysts estimate an upside of 1% to $48.33 in value from current levels. The stock has gained 17.2% in the past one year.

4. The Empire District Electric Company ( EDE) is a public utility engaged in the generation, purchase, transmission, distribution, and sale of electricity in parts of Missouri, Kansas, Oklahoma. and Arkansas. The company operates in three segments: electric, gas and other.

During the quarter ended Dec. 2010, total revenue stood at $132.8 million, up 9.9% from $120.9 million, while full-year revenue grew 9% to $541.3 million, driven by higher electricity sales owing to a warmer summer in 2010. Net income increased 14.8% to $47.4 million, while cash flow from operating activities rose 6.6% to $138.1 million.

On Feb. 3, 2011, the company announced quarterly dividend of 32 cents per share, with a record date of Mar. 1, 2011 and a payable date of Mar. 15, 2011. During 2010, the company paid dividend of $1.28 per share totaling $52 million. The company currently has a dividend yield of 5.77%.

All the four analysts covering the stock rate it a hold. On average, analysts expect an upside of 2% to $22.5 in value from current levels. The stock has gained 20.1% in the past one year and trades at 17.5 times its 2011 estimated earnings.

3. UIL Holdings ( UIL), primarily operates its regulated utility business consisting of the electric transmission and distribution operations.

During the year ended Dec. 2010, the company reported total revenue of $997.7 million, up 11.3% year-over-year from $896.6 million. Net income increased marginally to $54.9 million from $54.3 million. However, on a per share basis, earnings declined to $1.52 from $1.93.

During the year, the company paid an annual cash dividend of $1.728 per share totaling $87.4 million compared to $51.8 million during 2009. Furthermore, the company closed on the acquisition of three gas companies within six months of announcement, launched a new and innovative transmission venture and GenConn Energy's Devon plant was completed and became operational

Going forward, the company expects 2011 net income in the range of $88-$98 million or $1.75-$1.95 per share. The company currently has a dividend yield of 5.77%. Of the eight analysts covering the stock, 50% rate a buy, while 38% rate a hold. The stock has gained 9% in the past one year and trades at a P/E of 15.3

2. Inergy ( NRGY) owns and operates retail and wholesale propane supply, marketing and distribution business. The company also operates a midstream business that includes four natural gas storage facilities, including Stagecoach, Steuben, Thomas Corners, and Tres Palacios.

During the first quarter ended Dec. 2010, total revenue grew 18.8% to $596 million from $501.7 million owing to higher retail propane sales, attributed to acquisition-related sales coupled with higher average selling price of propane. Moreover, adjusted EBITDA for the quarter stood at $130.1 million, up 23% from $106.1 million in the comparable quarter last year.

During the December quarter, the company's board of directors approved a 3% year-over-year increase in quarterly dividend on its common stock which now stands at 0.705 cents per unit, or $2.82 per unit annually. Total dividend payout during the quarter was $76.1 million.

During Jan. 2011, the company declared a dividend of 0.705 cents per unit for a total distribution of $77.4 million with respect to the first quarter of 2011.

The company currently has a dividend yield of 7.1%. Of the 12 analysts covering the stock, 33% rate a buy and the remaining rate a hold. On average, analysts estimate an upside of 7.1% to $42.88 in value from current levels. The stock has gained 5.6% in the past one year.

1. Covanta Holding owns and operates infrastructure for converting waste to energy as well as other waste disposal and renewable energy production businesses in the Americas, Europe and Asia.

During 2010 fourth quarter, revenue grew to $419 million, up 13.9% year-over-year, while full year revenue increased 14.4% to $1.6 billion. Moreover, the company exceeded its full-year earnings guidance of 55-65 cents per share. Earnings stood at 68 cents per share. Additionally, free cash flow increased 3.5% to $357 million, topping the company guidance of $325-$350 million.

Covanta Holding recently initiated a regular quarterly dividend of 0.075 cents per share, implying an annual dividend of 30 cents per share. Total dividend distribution represents approximately 15% of the estimated 2011 free cash flow, or around $300 million. Furthermore, the company has authorized an additional $50 million in share repurchases, bringing the total authorized amount to $200 million.

The company's total dividend payout for the year was $328 million. Dividend yield stood at 8.7% and dividend per share was $1.5. Of the 12 analysts covering the stock, 58% rate a buy, while 25% affirm a hold. Analysts estimate an average upside of 16.7% to $20.5 in value from current levels. The stock has gained 13.2% in the past one year.

>>To see these stocks in action, visit the 8 High-Yield Defensive Stocks portfolio on Stockpickr.

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