ITC Holdings Corp. (ITC), PG&E Corporation (PCG): Will These Stocks Energize Your Portfolio or Fry It?

However, there are also some imperfections. UniSource is only pulling 6.5% profit margins. If Arizona ever finds itself in the relatively bad financial straits of a state like California, changes to the regulatory structures could be disastrous for UniSource. As well, there is also the solid possibility that the company isn’t that great of a deal, seeing as it’s trading for around 22 times its earnings.

My conclusion with UniSource is that it’s not solid enough to command the price sellers are asking for it at this moment. If it dips, that might be a great time to pick up shares.

The Foolish bottom line

Power and gas utilities have a solid moat in most cases, and the dividends are definite returns. But just like every other kind of investment, you have to be wary of getting a deal with a margin of safety and where the environment is conducive to more good times.

Chris Hodge has no position in any stocks mentioned. The Motley Fool recommends ITC and UniSource Energy.

The article Will These Stocks Energize Your Portfolio or Fry It? originally appeared on Fool.com.

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