Like waste management, regulated utilities are another industry that historically goes hand-in-hand with big, consistent dividend payouts. So it shouldn't come as a surprise that regulated gas and electric utility PG&E (PCG) is making our list of potential dividend hikers too. Right now, PG&E is good for a 45.5-cent quarterly payout that adds up to a 4.59% yield.
PG&E is the incumbent utility in Central and Northern California, with 5.1 electric and 4.3 million gas customers. The firm generates approximately 40% of its energy needs with a portfolio of 118 power plants spread across the state, but it no longer operates in the merchant generation business -- those unregulated assets got sold off almost 10 years ago when the firm over-levered its balance sheet and went bust. Now a more svelte PG&E operation is in place.
Regulated utilities benefit from very predictable revenues and cost structures. For PG&E, some of that regularity got shaken up thanks to legal problems and big investments in its gas pipelines. But while it's kept dividends flat for the last few years, 2014 could be the restart of the firm's growth curve. Stay tuned for earnings late next month.