AusNet Services (ASX: AST) is an often overlooked dividend play, currently sporting a trailing dividend yield of 5.3%, fully franked.

The company owns utility networks, transmitting electricity and gas to customers and has 6,500kms of electricity transmission lines, 50,000kms of powerlines and 700,000 plus electricity meters. The gas network comprises more than 10,000kms of distribution pipeline and 633,000 gas meters.

The company recently reported a 5% increase in revenues to $1.9 billion and a net profit after tax of $489.3 million for the 12 months to end of March 2016 (FY16). Adjusted net profit was $326.2 million, 20% higher than the previous year.

In FY16, Ausnet paid a dividend of 8.53 cents per share, 100% franked. At the current share price of $1.60, that equates to a dividend yield of 5.3%, or 7.6% grossed up.

In 2017, Ausnet is forecasting a dividend yield of 8.7 cents per share, 50% franked, which grosses up to 6.6%, or 5.4% net.

The company expects to continue generating stable, growing earnings, and says it will determine future dividends based on its free cash flow, after considering both maintenance and growth capital expenditure.

The one key risk many investors will be asking not just of Ausnet but virtually all utilities companies is how will renewable energy and portable energy storage change the way they currently do business? That includes the likes of Spark infrastructure Group (ASX: SKI), DUET Group (ASX: DUE) and APA Group (ASX: APA).

Ausnet has embraced that and is integrating new technologies into its networks already. The company is running the first trial of its kind in Australia, involving 14 homes enabled with solar panels and battery storage with a common connection to the grid.

The other risk with most utilities is also their debt levels. Ausnet has net debt of $6 billion but $11.7 billion of total assets against that.

Foolish takeaway

Investors looking to diversify their income could consider an investment in AusNet, yet there may be better opportunities out there.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.