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Telecom Plus: Utility income without the risk?

Telecom Plus lightbulb

Many of the UK’s big energy utility stocks offer high dividend yields but uncertain outlooks. And while price comparison sites are performing well, the dividend yields available from these companies are a little too low for our Income Booster portfolio. What we need is a business that combines the profitability of price comparison with the long-term focus of a utility. We think we've found just such a company in the FTSE 250.

Shareholders at utility buying club Telecom Plus (LON: TEP) have enjoyed 13 consecutive years of dividend growth and today the shares offer a yield of 4.8%. We think this unusual business could be a good defensive play for income investors in uncertain economic conditions.

A unique business?

Telecom Plus is better known to its customers as Utility Warehouse. It is structured as a discount club for utilities, broadband, mobile and home insurance which means customers benefit from the simplicity of a single monthly bill and the firm's bulk-buying power. Utility Warehouse also offers a cashback card that provides savings at over 2,000 UK…

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