Utility stocks offer a low-risk, high-income way to generate income through dividends. These companies are well-established and have strong operational capabilities. Utility demand will not slow down. But, it is important that you do your research and find the right company before you decide to invest in these stocks.
Dominion Energy
Dominion Energy may be the right choice for you if your goal is to find a high-yielding utility that also provides steady income. Dominion Energy has an impressive 3.3% dividend yield and is up almost 12% over its trailing year. This yield is lower that the average utility sector yield (3.75%). This company is reliable, and the dividend is likely to grow over the long run.
Dominion Energy expects 14% growth in revenue during the current fiscal year. Dominion Energy has a $37B capital expenditure plan, which will drive 6.5% annual earnings growth from 2026 to 2026. A large portion of this money will be used to develop wind and solar farms. This will help the company evolve its operations in light of climate change and emission reduction trends.
Exelon Corporation
Paul Fremont, Mizuho analyst has recently upgraded his price target on Exelon Corporation's stock to $46 instead of $32. He anticipates the stock to grow more quickly than the rest. He also forecasts a 13.4% FFO/debt ratio by 2024. With light regulatory requirements, the company is in a favorable position heading into 2022.
The company's vast size and geographic diversification provide investors with plenty of opportunity for growth in an uncertain market. In addition, the company has a long record of dividend growth and plans on spinning off any previously acquired businesses. This strategy will allow the company to grow substantially in 2022 and beyond. Other top utility stocks include UGI Corporation, which supplies natural gas, propane and electricity to businesses. It boasts a strong dividend yield, 3.1%, and a value of $8.8billion. Otter Tail Corporation is another utility stock well-positioned to grow in the future. It has exposure to both electricity distribution and PVC pipe manufacture. It also operates a parts stamping and manufacturing company.
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners, (BIP) operates infrastructure assets worldwide in the energy, transports, midstream, and data sector. The company owns and operates 61,000 km of electricity transmission lines, 4,200 km of natural gas pipelines, and 7.3 million connections to electricity and gas networks. It also has interests in data centers, water heaters, and rail operations.
Investors will enjoy the steady growth of Brookfield Infrastructure Partners operations. This company has a long history of making sound investments. It is also comfortable with its dividend payments. It also continues to benefit from its previous infrastructure investments.
American States Water
American States Water is one the most reliable utility companies, boasting a remarkable track record of dividend increases. It has been increasing its dividend over the past 68 year, making it one of most reliable dividend stocks. The company's management expects dividend growth of 7 to 10% annually through the year 2026. Its cash flows have been steady and make it a solid dividend stock. Because water utilities are more stable than gas utilities in terms of demand, they tend to be safer investments.
American States Water supplies clean water, electricity and other services to Southern California. They have long-term contracts with U.S. Government, including 11 military bases. This business model is a diversified one that provides the company with growth and recurring revenue. It is important that the company diversifies away from its dependence on one country, which is crucial for long-term success.