I’ve been wanting to shore up our Safe Haven Portfolio with some fortress blue chip stocks that pay a dividend yield north of 5%, since it’s my view the market going forward is going to exhibit a higher level of volatility, explains Bryan Perry, dividend expert and editor of Cash Machine.

However, I do expect the Fed to raise interest rates in December and maybe once or twice next year. I think the interest rate cycle is getting nearer to the end as growth in gross domestic product (GDP) and sales and earnings are forecasted to slow next year as well.

To this point, I believe legging into some highly defensive issues over the next few weeks and months will be a smart and prudent strategy. We had a spectacular run with the utility sector a couple of years ago when some of the majors were yielding over 5%.

Today, there are a couple that have my attention, since they are trading at steep discounts from a year ago because of rising interest rates and rotation out of defensive sectors in general. Additionally, a cold winter is being forecast for this year and utilities that serve regions where demand for heat and electricity will be on the rise, I find it timely to add one particular name to our holdings.

PPL Corporation (PPL) provides energy services to more than 10 million customers in the United States and United Kingdom. As one of the largest regulated utilities in the United States, its revenues and earnings are highly predictable. The company provides energy via a vast power grid on more than 36,000 square miles of service territory across two continents.

Formerly known as Pennsylvania Power & Light, PPL Corp. is based out of Allentown, Pennsylvania, serving 1.4 million customers in that state while distributing power to 10 municipalities in Kentucky, five counties in southwestern Virginia, three counties in Tennessee and operating four utilities in the United Kingdom.

In the latest third-quarter earnings release, PPL Corp. surpassed consensus estimates, posting $0.59 per share and above the $0.56 per share forecast. Revenues of $1.872 billion also exceeded estimates of $1.859 billion.

Growth in sales and earnings were driven by improved sales volumes in the United Kingdom and higher returns from capital investments in transmission lines and lower operational expenses. The company also lifted 2018 guidance by a nickel to $2.30-$2.40 per share.

The company is investing more than $15 billion through 2022 in new infrastructure and technology in advancing a smarter, cleaner and more reliable energy grid that will help drive down costs and drive up profits.

The utlity pays an annual dividend of $1.64 per share and when divided by the current share price of $31.25, it sports a current yield of 5.25%. The stock was trading at $40 per share a little over a year ago when the dividend yield was 4.10%.  I believe the stock will trade back up to $40 over the next year, which, when adding dividends, would provide a total return of 33%.

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