Duke Energy

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It's been a pretty lukewarm year so far for Duke Energy ( DUK) shareholders. Since the first trading day of January, the $29 billion regulated utility holding company has essentially traded flat, leaving investors turning to dividends for all of their return hopes.

With a 4.6% dividend yield, investors are at least up on the year with DUK's shares when those cash payouts are factored in. But Duke has been paying out the same 25-cent quarterly dividend for eight straight quarters now -- and the company has the wherewithal to hike those payouts right now.

Duke provides gas and electric service to customers in a handful of Southern and Midwestern states, in addition to the firm's generation and merchant power assets here in the U.S. and hydroelectric plants in Latin America. For income investors, regulated utilities are the goose that lays the golden egg: their profitability is consistent and recession resistant, and historically they hike dividends frequently. A pending merger with Progress Energy ( PGN) stands to make Duke the single biggest regulated utility in the country.

While Duke's other businesses add some volatility to earnings, they also add substantially more upside potential. Growth in Brazil has fueled most of its international successes in the past and should continue to make up the biggest part of the division in the future.

Despite a capital-intense business that's ramping up leverage to grow, cash coverage is more than sufficient to support a bigger dividend in 2012.

Duke shows up on a list of 10 Stocks That Will Let You Retire.

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