Utility stocks can provide income via dividends and are low-risk investments. These companies have a solid base and strong operational capabilities. In addition, utilities demand will never go away. However, before investing in these stocks, it is important to do your research well and choose the right company.
Dominion Energy
Dominion Energy, a high income utility stock that offers a steady income, is an option. The stock has increased nearly 12% over the last year and provides a 3.3% dividend yield. That yield is below the average of 3.75% in the utility sector. This company is reliable, so the dividend will likely increase over the long term.
During the current fiscal year, Dominion Energy is predicting 14% revenue growth. Additionally, Dominion Energy has a $37 Billion capital expenditure plan that will allow for 6.5% annual earnings increase through 2026. The majority of this money will go towards the development of wind and sun farms. 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. Fremont expects that the stock will grow faster than the rest of its industry. He forecasts a 13.4% ratio FFO/debt in 2024. The company has a positive outlook for 2022 due to a lack of regulatory oversight.
Investors have plenty of opportunities to grow in uncertain markets because of the company's size and geographical diversification. The company also has a history of growth in dividends and plans to spin out its previous acquisitions. This strategy should allow it grow 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 poised for growth. This utility stock has exposure to PVC pipe and electricity distribution. It also owns a business in parts stamping, manufacturing.
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (BIP), is a global infrastructure business that owns or operates assets in energy, transport, midstream, data and other sectors. 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 can benefit from Brookfield Infrastructure Partners' steady growth. The company is known for making solid investments and is happy with its dividend payments. It still reaps the benefits from previous infrastructure investment.
American States Water
American States Water, with its long-standing track record of dividend growths, is one of the best utilities companies to invest. The company has increased its dividend for the past 68 years, which makes it one of the most reliable dividend stocks. Management of the company anticipates that there will be a 7-10% increase in dividends through 2026. Its cash flow has also been very steady, which makes it an excellent dividend stock. Water utilities are generally more conservative than gas utilities because the demand for their services tends to be less stable than that of gas.
American States Water supplies electricity and clean water to Southern California. American States Water has long-term contract with the U.S. government. This includes 11 military bases. This diverse business model gives the company recurring revenue and growth possibilities. The company is also diversifying away from its high reliance on one state, which is important for long-term growth.