Utility stocks can provide income via dividends and are low-risk investments. These companies have a solid base and strong operational capabilities. There will be a constant demand for utilities. However, before investing in these stocks, it is important to do your research well and choose the right company.
Dominion Energy
If you are looking for a high-yielding utility stock that provides a steady income, then consider Dominion Energy. The stock is up nearly 12% over the trailing year and offers a 3.3% dividend yield. That yield is below the average of 3.75% in the utility sector. The dividend will likely grow over time as the company is reliable.
Dominion Energy anticipates a 14% rise in revenue over the current fiscal. Moreover, the company has a $37 billion capital expenditure plan that is expected to drive annual earnings growth of 6.5% through 2026. This money will be used to build wind and solar farm. This money will allow the company to adapt its operations to climate change and emission reduction trends.
Exelon Corporation
Paul Fremont, Mizuho analyst and recently upgraded Exelon Corporation’s price target to $46. This is an increase from $32. He expects the stock to grow at a faster rate than the rest of the industry. He predicts that the FFO/debt ratio will be 13.4% by 2024. With a relatively light regulatory calendar, the company is in a strong position for 2022.
The company's huge size and geographic diversification offer investors ample opportunity to grow in an uncertain energy 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 has a strong dividend payout of 3.1% and a valuation in excess 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 owns a business in parts stamping, manufacturing.
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (BIP) is a global infrastructure company that owns and operates assets in the energy, transport, midstream, and data sectors. The company owns and manages 61,000 kms electricity transmission lines, 4,200km of natural gas pipes, and 7.3 Million connections to electricity or gas networks. It also has interests in data centers, water heaters, and rail operations.
Investors will reap the benefits of Brookfield Infrastructure Partners’ steady growth. The company is known for making solid investments and is happy with its dividend payments. It continues to reap the benefits of its infrastructure investments.
American States Water
American States Water is one the most reliable utility companies, boasting a remarkable track record of dividend increases. The company has raised its dividend for the last 68 years. This makes it one the most reliable dividend stocks. Management of the company anticipates that there will be a 7-10% increase in dividends through 2026. The company's cash flow is also very stable, making it a great 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 water and electricity to Southern California. The company has long-term agreements with the U.S. government including 11 military bases. This diversification of business models provides the company with both recurring revenues and growth opportunities. This diversification is essential for long-term development.