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Some investors seek growth, while other investors -- particularly when rising interest rates threaten to shorten a bull market's run -- seek value with a decent yield. If the current concerns over rising interest rates have left you feeling a little squeamish, you may want to consider Consolidated Edison (NYSE: ED).
Con Ed's shares have has fallen off a cliff recently, down to about $46.50 as of Monday's close from near $53 early this spring, but fear not: ED will be around in the years ahead. ED is the holding company for the electric and gas utilities that serve New York City, most of Westchester County, NY and parts of New Jersey and Pennsylvania.
The bread and butter of Con Ed's revenue stems from consumer electric customers in the city that never sleeps, and with immigration and a growing economy likely to increase ED's NYC household subscriber rolls, revenue should benefit nicely. The Reuters 2007 and 2008 revenue consensus estimates are $12.9 billion and $13.4 billion.
Further, it appears ED now has the capital -- and the rate structure in place -- to improve its electric infrastructure to meet both New York City's and the regions growing power demands.
But best of all for investors: ED pays a healthy dividend, which currently translates to about a 5% yield.
In other words, if you buy shares of ED, you'll get the equivalent of the income from some bonds, with a good chance for an equity upside, besides.
A 5% percent return with a decent chance for more may not seem like much, but for the investor who's concerned about possible rough seas from rising interest rates, it's a safe port-of-call.
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