European utilities with the best yields

Europe's energy giants come with some whopping dividend yields - and they're cheap too. But before you snap up a bargain, Phil Oakley explains what you need to watch out for.

If there's one sector of the stock market that looks tempting for income-seekers at the moment, it's European utilities. A number of the continent's biggest electricity and gas companies are currently offering blockbuster dividend yields.

Given that most of us need to use electricity and gas, why are yields so high and share prices so low? Do they represent bargains and a secure source of income? Or is the market right in saying that the high dividends on offer just can't last, given the economic problems in many of the eurozone's countries?

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AccionaSpain€40.743.047.46%0.91
SSEUK1,418p83.725.90%1.40
EDPPortugal€1.980.199.60%1.53
EDFFrance€16.921.27.09%1.70
EnagasSpain€14.241.087.58%1.43
EnelItaly€2.360.1586.69%2.33
FortumFinland€14.720.996.73%1.51
Gas NaturalSpain€9.690.8889.16%1.68
GDF SuezFrance€17.861.478.23%1.11
IberdrolaSpain€3.160.3149.94%1.41
National GridUK678.5p40.716.00%1.35
Red ElectricaSpain€35.212.376.73%1.53
Snam SPAItaly€3.520.257.10%1.13
PGE PolskaPolandPLN19.471.176.01%1.91

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.