5 Top Utility Stocks With Good Dividends The Motley Fool
The U.S. utility revenue is on track to hit $1.1 trillion by 2025 from $993 billion in 2020. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. PPL is currently trading near fair value and this appears to be a reasonable entry point for purchase. The company isn’t as high on my personal radar as some of the others on the list, but if it can hit the targets provided by management, would be a nice opportunity for investors.
Taxable brokerage accounts do not, but they offer more flexibility. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands review moneyball of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. At #8, MDU Resources Group is another new entry on the top ten list.
Resources like the Simply Investing report can help identify and research high-quality dividend stocks. It means a high amount of predictability about prospects for the company. FPL is the largest electric utility in the state of Florida and one of the largest electric utilities in the U.S. Here are a few things I research before investing in a utility stock. In other words, these are the questions I want to be answered before committing my money.
Utility stocks are ideal choices for risk-averse income investors, such as retirees, because of their defensive qualities and secure business models. After all, people will always need electricity, even when the economy goes into a deep recession. This provides a great deal of certainty that the profits generated by a utility, which are returned to shareholders through high dividend yields, won’t suddenly vanish.
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Sempra is an energy infrastructure company headquartered in San Diego with an employee force that’s 20,000+ strong. The company serves more than 40 million customers across North America and had more than $72 billion in total assets at the end of 2021. MTL stock is currently trading at $5.98 and shares are up 264.4% year to date (YTD).
- The consensus projects earnings growth of 6% this year, 8% next year, and 6% in 2023.
- It’s admittedly not intuitive to find an industrial company mashed up with a regional utility, but this hybrid model has served shareholders very well.
- However, utility stocks often are more stable than companies in other sectors, and have reliable revenue streams that often support generous and sustainable dividends over the long term.
- Thus, we’re talking about 35% expected upside as a ballpark figure over the next year.
- Because utilities are a necessity, stocks in this sector may be less susceptible to economic downturns.
Finally, the Power Generation Group also manages the company’s fleet of power generating stations. Power sources include renewables like water, wind and solar. And more traditional power sources like nuclear, gas, coal and oil. They make money primarily by producing, ifc markets review transmitting and selling electricity to customers in 11 states centered around Ohio in the Midwestern United States. NEER’s strategic focus is on the development, construction, and operation of long-term contracted assets throughout the US and Canada.
Top Utility Stocks of the First Half of 2016
Among other initiatives, DUK is pursuing a clean energy transition plan to achieve net-zero methane emissions from their natural gas service and a 50% carbon reduction from their electric generation by 2030. The company is also aiming to achieve net-zero carbon emissions by the year 2050. In this article, we discuss the 15 best utility stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Utility Stocks to Invest In. The company provides electricity to 2.9 million customers in Arkansas, Louisiana, Mississippi and Texas, and also serves about 200,000 natural-gas customers. One of the country’s largest utilities, Duke Energy (DUK) serves nearly 8 million electricity customers in the Southeast and Midwest, plus 1.6 million natural-gas customers.
You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he’s currently ranked No. 340 out of more than 75,000 rated members. An Anglo-American gas and electric utility that derives most of its profits from the United Kingdom, National Grid pulls revenues roughly equally from both the U.K. And U.S. (primarily from operations in the Northeast, including New York, Massachusetts, New Hampshire, Rhode Island, city index: a reliable broker and Vermont). Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. That should make utilities firms like Sempra more appealing to investors.
Best Stocks of 2016, No. 5: AK Steel Holding Corp.
On December 3, WEC announced an 8.2% increase to the dividend, which now puts it at the mid-point of the targeted 65-70% payout ratio based on 2016 earnings. This has caused me to slightly lower my dividend growth projections from 7% to 6.5% going forward, despite a higher estimated earnings growth rate, as I expect dividend growth to mirror earnings growth from now on. PPL Corporation is new to the watch list, and debuts at #6 in the rankings. The company is a Dividend Contender, with a 14-year streak of dividend increases, during which it has grown the payout at a 6.1% annualized rate over the last decade.
However, looking at the dividend yield, MDU is currently trading at the highest yield since the recession. These stocks are selected based on the closing prices and declared dividend rates as of December 17, 2015. With the math and spreadsheets out of the way, now we can move on to selecting the top ten.
Benchmark 10-year Treasury yield tops 4.7% intraday
It’s essentially a water utility but also provides long-term contracted services on U.S. military bases. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
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Even if utility stocks are considered defensive investments. Dividends Diversify model portfolio – My model dividend stock portfolio includes 6 utility stocks. Dividend stock screeners – Yahoo Finance has a dividend stock screener that I use periodically to generate investment ideas.
That means a highly reliable business with a stable revenue model. And when you have the scale and balance sheet of Dominion on top of that, it makes for a nearly bulletproof business model. For its last quarter, the company posted a 0.3% increase in revenue and an increase in earnings per share from $0.22 to $0.33 compared to the same period last year. The company saw improvement in both its regulated energy business as well as its unregulated energy business. Operating Income from the regulated segment increased from $9.2M to $11.8M compared to the same period last year, while operating income from its unregulated segment improved from a loss of $2M to a loss of $1M. However, they’re not as reliable as bonds and with yields approaching 5% utilities stocks have begun to pale.
NextEra stock normally carries a high price to earnings ratio. It has the highest stock price to earnings ratio of the 6 utility stocks we are reviewing today. Most utility stocks carry a debt to equity ratio of greater than 1. All that means is that they finance more of their assets with debt. Rather than financing from earnings or cash from selling stock to the public.