The electricity utility sector is one of the most defensive sectors in the stock market. The companies in this sector generate steady cash flow and typically have little debt. This makes the electric utility sector a safe place to invest your money during market volatility.
There are several good options when it comes to investing in electric utilities. Southern Company (SO) is a large, well-diversified utility with a strong track record of dividend growth. Thanks to its low valuation and high dividend yield, Duke Energy (DUK) is another good option.
If you’re looking for a more speculative play, you may want to consider FirstEnergy (FE). This company has struggled in recent years, but it could be a turnaround candidate given its low price and high dividend yield. In addition, the Best Utilities Stock To Buy Right Now share additional noteworthy characteristics that give them the power to outperform.
The Best Utilities Stock To Buy Right Now
10.NextEra Energy (NEE)
NextEra Energy (NEE) is the best utility stock to buy. The company has a strong history of dividend growth, and its regulated businesses provide stability and visibility for the future. Additionally, NextEra Energy is one of the largest renewable energy providers in the United States, which positions it well for the future as renewables continue to grow in popularity.
- Market Cap: $143.5 Billion
- Dividend Yield: 1.40 (1.93%)
9. Duke Energy (DUK)
According to top analysts, Duke Energy (DUK) is the best utilities stock to buy right now. The company has a strong history of earnings growth, and its stock is attractively priced compared to its peers. Duke Energy is also a dividend aristocrat, which has increased its dividend payments for 25 consecutive years.
- Market Cap: $67.6 Billion
- Dividend Yield: 3.86 (4.23%)
8. Dominion Energy (D)
Dominion Energy is a top-tier utility company with a solid financial position and healthy growth prospects. The company has a diversified electric portfolio with a focus on regulated utilities. Dominion is also expanding its natural gas infrastructure, which should provide growth opportunities in the years ahead. The stock is attractively valued at current levels and offers a dividend yield of 3.7%.
- Market Cap: $62.1 Billion
- Dividend Yield: 2.52 (3.32%)
7. The Southern Company (SO)
The Southern Company (SO) is one of the best utility stocks to buy. The company is a major player in the electricity market in the southeastern United States, and it has a strong financial position. Southern also pays a generous dividend, and its stock is attractively priced.
Southern generates most of its electricity from coal, nuclear, and natural gas plants. This makes the company relatively resistant to swings in energy prices. Southern also has a large regulated utility business that provides stable earnings growth.
The company’s stock has been hit hard by the plunge in energy prices over the past year, and it now trades for just 14 times earnings. This makes Southern’s stock an attractive value proposition for investors. The company also pays a dividend of 3.5%, which is substantially higher than the yield on Treasuries.
- Market Cap: $65.2 Billion
- Dividend Yield: 2.56 (4.16%)
6. American Electric Power Company (AEP)
American Electric Power Company (AEP) is one of the largest electric utilities in the United States. The company has more than 5 million customers and generates more than 24,000 megawatts of electricity. AEP operates in 11 states and has a market cap of more than $30 billion.
AEP is a well-run company with a strong history of profitability. In addition, the company has a dividend yield of 3.4%, and its stock is up more than 20% year-to-date. As a result, AEP is an excellent stock to buy for income and long-term growth potential.
- Market Cap: $41.6 Billion
- Dividend Yield: 2.96 (3.55%)
5. Exelon Corporation (EXC)
Exelon Corporation (EXC) is one of the best utility stocks to buy. The company has a solid financial position, with a debt-to-equity ratio of 0.49 and a current ratio of 2.02. Additionally, Exelon has a dividend yield of 3.8%, and the company has increased its dividend for six consecutive years.
Exelon is also a well-run company, with an operating margin of 17.7% and a return on equity of 15%. The company has been profitable for the past ten years, and it is expected to be profitable in each of the next three years. Exelon is also a good value stock, trading at just 13 times earnings. The stock could rise in value if interest rates increase, as investors may flock to defensive stores like Exelon.
- Market Cap: $40.1 Billion
- Dividend Yield: 1.53 (3.74%)
4. Xcel Energy (XEL)
Xcel Energy (XEL) is the best utilities stock to buy. The company has a solid financial position with a stable dividend yield of 3.5%. Xcel Energy also has a five-year average dividend growth rate of 8.8%. The company is well-positioned to continue its growth in the future.
- Market Cap: $35.7 Billion
- Dividend Yield: 1.72 (2.62%)
3. Sempra Energy (SRE)
Sempra Energy (SRE) is one of the best utility stocks to buy. The company has a strong balance sheet, with a debt-to-equity ratio of only 0.5. Sempra Energy also has a dividend yield of 3.7%, which is well above the average dividend yield of 2.1% for utility stocks.
The company’s earnings growth has been impressive in recent years, and analysts expect its earnings to grow by 9% this year and by another 10% next year. Sempra Energy is also attractively valued, with a price-to-earnings ratio of only 18.6.
- Market Cap: $36.9 Billion
- Dividend Yield: 4.18 (3.26%)
2. WEC Energy Group (WEC)
The energy sector has been tearing lately, with the S&P Energy Select Sector Index up more than 20% in the past year. And within that sector, electric utilities have been among the top performers.
In the past year, one of the best-performing utility stocks has been WEC Energy Group (WEC), which is up more than 30%. The company operates in four states in the Midwest and Great Lakes region and provides electricity and natural gas to more than 4 million customers.
WEC Energy Group is a well-run company with a strong track record of delivering consistent earnings growth. It also pays a healthy dividend of 3.3%, higher than the average dividend yield for S&P 500 stocks of 2.1%.
The company is also very shareholder-friendly, returning significant cash to shareholders through share buybacks and dividends.
- Market Cap: $29.5 Billion
- Dividend Yield: 2.71 (2.90%)
1. Public Service Enterprise Group Incorporated (PEG)
Public Service Enterprise Group Incorporated (PEG) is one of the best utility stocks to buy. The company is a leading provider of energy in the Northeast and Mid-Atlantic regions of the United States. It also has a strong presence in the regulated Texas market.
Public Service Enterprise Group Incorporated (PEG) is well-positioned to benefit from growth in the U.S. energy market. The company has a diversified mix of businesses, which gives it stability during economic turbulence. In addition, Public Service Enterprise Group Incorporated (PEG) pays a healthy dividend, making it an attractive investment for income-oriented investors.
- Market Cap: $29.1 Billion
- Dividend Yield: 1.96 (3.40%)