The 9 Best Utility Stocks to Buy Now

To determine the best stocks for 2016, I’m only taking into consideration stocks that have combined scores of 15 or higher. This combination of current growth and a bright future has investors very eager to own AMAT. Business is good, with the top line at AMAT growing at a 17% clip this fiscal year if current forecasts hold. And in an age when semiconductors are part of just about everything we use, the services Applied Materials provides are increasingly in demand.

Brookfield Renewable Partners (BEP, $28.57) has a portfolio of renewable power generation facilities worldwide spanning hydroelectric, wind and solar. It’s also a global organization, with operations in North America, Colombia, Brazil, Europe, India and China. Chesapeake Utilities has also increased its Funds From Operations per share at a higher rate over the past five years compared to Laclede Group. Out of this group of stocks, my top pick is Chesapeake Utilities. While I believe that AGL Resources is a solid company, the pending merger with Southern means that there will be very little price movement in its stock.

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NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. The U.S. economy cannot function without the services of utility companies. Apart from supporting almost every critical infrastructure of the economy, the utility sector also employs many people.

That makes the Allentown, Pa.–based utility one of Burks’s favorites. PPL provides electricity and gas in Pennsylvania and Kentucky, with a smattering of customers in Virginia and Tennessee. However, like Duke, PPL has also ventured overseas and operates a regulated utility in the United Kingdom. Operation the pin bar trading strategy brings in about one-third of PPL’s revenues, it accounted for nearly half of its profits in 2015, despite the strong dollar. (When the greenback gains in value, money earned in other currencies translates into fewer bucks.) As currency headwinds subside, that unit could prove even more valuable.

  • But if your primary goal is safety, you should approach this sector with caution.
  • To find the best-performing utility stocks, we screened U.S. companies that are included in the «Utilities» sector.
  • The consensus projects profit growth of 8% this year, 6% in 2022, and 7% in 2023, supported by revenue growth of at least  6% in all three years.
  • Because of the costs related to bringing these projects to completion, the company has had to take on significant amounts of debt.

The utility sector is one of the largest sectors of the U.S. equity market, boasting a collective market capitalization of $1.52 trillion. This sector primarily consists of electric, natural gas, and water companies. As we reported in October 2022, utility stocks were on track to strongly outperform the broader market in 2022. By the end of the year, the S&P 500 utility sector was down by just 0.5% for the year, compared to a 19% decline for the S&P 500 index. Which of these five is the best dividend-paying utility stock to invest in? Consolidated Edison has the lightest debt load relative to its market capitalization, Southern Company has the fastest growth rate, and National Grid has the richest dividend yield.

The whole company posted about $1.2 million in revenues last year, with the electric utility arm of the company representing about 40% of that. And thanks to windfall dividends over the last year, the company has a yield that is roughly five times that of the S&P 500. Consistently paid dividends are a big advantage of utility companies. Check out a company’s dividend-paying thinkmarkets forex broker review history to get a sense of how stable those payments are. Shares are trading above «fair value» levels and may not be as attractive as some other companies on the list. However, with a nearly 4% yield, a solid track record, and improved outlook for earnings growth going forward, I will be looking to add to my position on any significant pullback.

Sempra Energy

For investors, it’s hard to know what to expect in 2023,  especially following the disruptions of last year caused by the war in Ukraine and a series of historic interest rate increases that roiled credit markets. Plus, with continued talk of recession risks in the months ahead, it’s hard to imagine anything could be truly safe on Wall Street. Laclede Group is also a strong player in this industry sector, but its recent quarterly results were worse than expected, missing on both revenue and earnings. I feel that Chesapeake Utilities is better positioned to see higher returns this year and that is why it is my top pick for 2016.

Public Service Enterprise Group Incorporated (PEG)

It carries a high investment-grade credit rating of A- from S&P. Like other solid dividend stock investments, NextEra has had many years of high dividend growth. Over the limefx broker review past 7 years, NextEra’s dividend has been increased by management on average more than 11% per year. Dividend yield and dividend growth are often inversely related.

Investing In Utility Stocks:  6 Utility Stocks To Buy For Long Term Investors

More details on each of the scores can be found here and here. Virtual reality graphics and artificial intelligence computing are still very much in their infancy, but Wall Street seems to think Nvidia will be at the top of both of these fields. And judging by continued momentum in its stock, investors think much more growth is ahead for NVDA. The former prevented competitors from entering the space, and the latter will provide a very sympathetic regulatory environment for energy companies like Spectra in the next few years. That’s partially because of Best Buy’s investment in its own digital sales operation, with more than $4 billion in online sales across fiscal 2016 for more than 10% of total sales. But it’s also because BBY stock has right-sized operations with aggressive cost cutting across 2015, and has outlasted brick-and-mortar rivals.

The company is a powerhouse of the sector, with a portfolio of assets that include roughly 30 gigawatts of electric generating capacity, mostly in Virginia and North Carolina. OGS just bumped its quarterly per-share dividend payout to 65 cents from 62 cents. This makes distributions more than double the 30 cents per share it was paying at the end of 2015. This long-term dividend growth is another hallmark of the best utility stocks to buy. Unlike most industrial companies, utilities are delighted to have big capital-spending projects under way.

The company also controls more than 50,000 megawatts of generating capacity. Analysts target profit growth of 19% this year, followed by 22% and 12% in the next two years. Comcast’s 1.8% yield is lowest on the Top 15 Utilities list, but the company should deliver the best dividend growth. In other words, NFE uses its know-how to not just operate its own energy infrastructure, but also to provide logistics support to others in the natural gas industry. You won’t get a dividend, as Fluence is operating near breakeven at present as it continues to invest heavily in its plans for the future.

And, that cash is normally financed through higher debt and financial leverage. Utility companies require large amounts of capital to operate. Regulated utilities have less exposure to market volatility. This is because they can request a rate increase if market conditions dictate the need. Also, multi-utilities are frequently organized as holding companies.

The company has a relatively modest electricity generation business that serves some 135,000 connections at residential, commercial and industrial customers in the Minnesota region. It’s important to understand that Brookfield is not a traditional utility provider like your local power company. Rather, it generates the electricity, but then sells the bulk of the power it generates under long-term agreements with third-party utilities or passes the electricity on directly to large corporate buyers. Those multi-year agreements with deep-pocketed customers help provide Brookfield with very stable cash flow, and generous dividends as a result. 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.

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