Stock Quotes in this Article: OGE, PNW, WR

 SAN FRANCISCO (Stockerblog) -- According to the U. S. Energy Information Administration, fossil fuels supply about 70% of the country's requirements for electricity generation. Currently the dominant fossil fuels used by the industry are coal, petroleum, and natural gas.

Many investors feel that the price of oil has peaked for now and is in a downtrend. Some analysts believe that due to the glut of natural gas and the recent major gas finds, the price of gas will remain low for a while. The price of coal is much lower than it was in 2008. If this trend continues, investors could benefit from investing in utility stocks that use oil, gas or coal as a major fuel source of electrical generation, since the cost savings for these companies should pass through to the bottom line.

At, we host a list of around 30 electric utilities with yields above 4%. Many of these companies use fossil fuels as a significant source of fuel to generate electricity.


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    For example, Pinnacle West Capital (PNW) has one of the heaviest exposures, with approximately 31% of its electric energy coming from natural gas and oil. About 38% comes from coal and 27% from nuclear. This Phoenix-based electric utility trades at 14 times earnings and provides a generous yield of 5%. Earnings for the quarter ending Sept. 30 were up 25%. The company reports its latest earnings Feb. 18.

    OGE Energy (OGE) has 38% of its energy coming from natural gas, with 60% from coal. The company serves the south central U.S. The stock has a price-to-earnings ratio of 15 and a yield of 3.3%. Earnings for the quarter ending Sept. 30 were up 19%. The company reports its latest earnings Feb. 17.

    Westar Energy (WR) generates about 7% of its energy from natural gas, with 78% from coal and 14% from nuclear. This utility, which serves Kansas, has a P/E of 13.8 and a yield of 4.8%.

    If you like utility stocks, you can find a free Excel database of utility stocks, which you can download, update and sort, at

    At the time of publication, author had no positions in stocks mentioned.

    Fred Fuld III, the publisher of stock and bond investing blog Stockerblog and founder of WallStreetNewsNetwork, has been in the financial services industry for over 20 years, working as an investment advisor, options market maker at the Pacific Stock Exchange, vice president of a San Francisco money management firm, university faculty member and wholesaler for the New Alternatives Fund (the first environmentally conscious mutual fund). He is the author of the books Investing in Brazil Stocks and The Green Light on Green Stocks.