As if our hunt for yield wasn’t hard enough!

On renewed European fears, 10-year Treasury bond yields hit a new record low of 1.41% on Monday.

We’d have to be crazy to forfeit our hard-earned capital – for a decade, no less – in exchange for such a paltry yield.

So what’s an income investor to do? How about saying hello to our last-minute dividend opportunity of the month!

In an effort to provide you with a reliable income opportunity before the month’s out, I screened for stocks with the following criteria:

• Yield that’s at least double 10-Year Treasuries.
• Ex-dividend date within the next two weeks.
• Dividend that’s expected to increase over the next three years, according to Bloomberg estimates.

Of the handful of stocks the search returned, I’m convinced Pinnacle West Capital Corp. (NYSE: PNW ) is the most compelling. Here’s why…

There’s Safety in Utilities, Particularly This One

Founded in 1985, Pinnacle West provides electricity services in Arizona to more than 1.1 million homes and businesses.

Yes, it’s a boring utility stock. But I don’t need excitement when it comes to income investments. All I need is reliability. And, as I’ve noted before, the Utilities Sector has lived up to its billing as a safe haven .

Consider: Over the last year, the utilities sector returned 10.5%, making it the third-best performing sector in the S&P 500 Index. Only the technology (12.44%) and consumer staples (11.24%) sectors performed better.

Of course, the solid performance makes sense. No matter what’s happening in the United States – or Europe, for that matter – people and businesses need to keep the lights on. And that’s precisely why we can expect Pinnacle West to keep delivering reliable results. Electricity is a necessity to everyday life.

Heck, if you have any doubt how reliable the company’s business is, just consider its dividend history. Even through the Great Recession, in a market hardest hit by the real estate slowdown, the company wasn’t forced to cut its dividend.

Speaking of the Arizona market, the narrow focus actually makes this utility stock even more attractive.

You see, populations in warmer climes, like Arizona and my home state of Florida, have historically grown faster than the U.S. national average. And more people means increased demand for electricity and more customers for Pinnacle West.

The numbers bear this out, too. While the U.S. population is growing at about 0.9% per year – and the global population is growing by about 1.1% per year – Pinnacle West’s management expects customer growth of 1.6% per year.

The investment case here is further buoyed by the regulatory environment, if you can believe it. Arizona happens to be much more friendly to utility investors.

Case in point: Pinnacle West recently received a favorable retail rate case approval in mid-May, which was less than one year since its initial request. That’s quick. Similar approvals in other states usually take about 20 months.

Up 10%, But Still Affordably Priced

If you’re reluctant to buy Pinnacle because the stock recently hit a 52-week high, don’t be. Despite the rally, Pinnacle West isn’t overpriced…

Shares currently trade at a price-to-earnings (P/E) ratio of 17.6. That’s in line with the industry average P/E ratio of 17.5. But it’s about a 15% discount to the company’s five-year average P/E ratio.

In relation to the broader market, Pinnacle West trades at about a 5% discount to the S&P 500 Index based on its forward P/E ratio. Again, that’s not a screaming bargain. But it indicates that the recent rally didn’t push up the stock’s valuation to prohibitively expensive levels.

That’s good news for us. After all, the last thing we want to do is buy a stock for its attractive yield, only to have our investment undermined by a falling stock price.

In this case, the opposite is likely to happen. Shares are in a confirmed uptrend, advancing almost 10% year-to-date with more room to run.

As for the most important element to income investors – the dividend – it checks-in at an attractive 3.9%.

Here’s the catch…

The next dividend payment of $0.525 per share will be paid on September 4, 2012 to shareholders of record on August 1, 2012. So, if you want to take advantage of this last-minute dividend opportunity, you need to buy shares before July 30.