SP Ausnet provides growth and high yields

Infrastructure stocks are one of only a few industries to be moderately priced in an economic climate that is artificially pushing up high yielding stocks.

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Investors have been racing to find the highest yielding stocks and SP Ausnet (ASX: SPN) provides yield and much more.

Healthy trendlines accompany SP Ausnet's 6.3% dividend yield and yesterday the company pushed its share price in the right direction, releasing full year results. The diversified energy infrastructure business operates Victoria's primary electricity transmission network and electricity distribution network in eastern Victoria.

Yesterday's results highlight that NPAT was up 9.5% to $279.1 million and revenues gained at a healthy pace of 6.8% despite a slight decline in volumes distributed. Net operating cash flow was $568.6 million up from $430.5 million last year.

The growth has been driven by regulated price increases for both electricity distribution and AMI revenues. Since January 1, price increases have also included revenues under incentive schemes, the pass through of increased transmission charges and increases for the additional recovery of solar rebates paid that were not recovered in 2012.

Infrastructure stocks pay high dividends and are one of only a few industries to be moderately priced in an economic climate that is artificially pushing up high yielding stocks. Spark Infrastructure (ASX: SKI) and Envestra (ASX: ENV) are both utility infrastructure providers that are reasonably priced and offer a dividend over 5.5%.

Envestra provides retailers with natural gas pipelines reaching over 22,000 km and is steadily expanding. In the last 12 months, the company returned a 38% gain on its share price and an average of 38% over the past three years. However, the company seems well priced and has proven time and again that it can deliver results.

Foolish takeaway

Infrastructure companies carry massive amounts of debt to deliver key services for business and government. DUET Group (ASX: DUE) has a debt to equity ratio of over 300%, which would usually be considered very high, but investors must be expecting something big with a P/E of almost 33. As SP Ausnet shows us, there are still high yielding bargains to be found in the industry and investors could do worse then buy its shares.

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