Sempra Energy (SRE), PG&E Corporation (PCG), Wal-Mart Stores, Inc. (WMT): Dividend Investors Be Warned

Look outside traditional utilities

To find quality dividends it is important to look outside of utilities to other firms like Wal-Mart Stores, Inc. (NYSE:WMT) and Intel Corporation (NASDAQ:INTC). Wal-Mart Stores, Inc. (NYSE:WMT) and Intel Corporation (NASDAQ:INTC) are on the other side of the solar equation. Over 100 of the company’s California store have solar panels. Intel has also installed solar panels on a number of its facilities.

Wal-Mart Stores, Inc. (NYSE:WMT) has expanded its business by heading into the emerging markets. From Mexico to China it has become one of the most powerful retailers in the globe. Going forward it will not grow as quickly, but it will grow. Its large size helps it to push cost increases onto its customers and expand its dividend along with inflation. With a healthy total debt to equity ratio of 0.81, return on investment (ROI) of 15.5% and return on assets (ROA) of 8.8%, it is able to provide a strong dividend for investors.

Intel Corporation (NASDAQ:INTC) is one of the major designers of central processing units (CPUs) for electronic devices. It has faced challenges from other chip designers who use less power intensive designs, but now Intel realizes that the market wants efficiency and performance. It is rolling out new chip designs over the next couple years that will help it to gain market share in the mobile market. Mobile growth will help it to further expand its dividend. The company is well run with a low total debt to equity ratio of 0.26, a ROI of 16.0% and a ROA of 12.4%.

Conclusion

Wal-Mart Stores, Inc. (NYSE:WMT) has a strong future ahead as its large size will allow it to grow its dividend along with inflation. Intel has a positive future as its newest product designs will give it more sales in the mobile sphere. Traditional utilities like PG&E Corporation (NYSE:PCG) and Sempra Energy (NYSE:SRE) are different story. In California they face threats from growing solar generation, and rising government yields have already brought down their yields. Dividend investing isn’t always easy, but a little investigation goes a long way.

The article Dividend Investors Be Warned originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Joshua is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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