Three lions of UK energy are worth a try

They are the British Lions of the UK energy industry.

Nearly 20 years on from privatisation and having survived the waves of American and then European invaders, National Grid, Centrica and SSE (the old Scottish & Southern Energy) stand as beacons of British independence.

These companies are in the forefront of the green energy revolution and the campaign to keep the nation's lights on: National Grid is borrowing and committing billions to connect new gas supplies or windfarms or other renewable energy projects; Centrica and SSE are leading the investment in these new power sources.

The two household energy suppliers — Centrica's British Gas and SSE's Southern Electric — are currently selling electricity and gas some way cheaper than their rivals German-owned E.On and npower, the French of EDF and Spanish-owned Scottish Power.

The British trio routinely make annual profits well above £1 billion and as such their dividends are among the most rock solid in the FTSE 100. In these days of 0.75% interest rates on building society savings, those dividends are also among the most attractive yielding stocks on London's blue chip index, paying around 5%.

So could holding shares in these companies be a canny way of offsetting rising household energy bills?

High dividend yields can be a warning sign, a reflection of the low valuation of the stock echoing investor fears.

And these stocks are suffering from an industry sector discount. On the one hand energy is a market riven by uncertainty resulting from Government policy vacuum and the disconnected roadmap to a low carbon future.

On the other hand, the companies' consistent levels of high profitability make them a target for criticism, leading to fears that Government will intervene, that windfall taxes might be levied or prices forcibly cut. Labour's recent energy manifesto hinted at no such penalties. And it would be perverse if a new Conservative government contradicted that.

So the question is: given the yields, should shares of these Three Lions be a candidate for every desktop investor's portfolio?