Utility stocks are a great way of earning income through dividends, and they are a low risk investment. These companies have a solid foundation as well as good operational capabilities. Moreover, the demand for utilities will never dry up. But, it is important that you do your research and find the right company before you decide to invest in these stocks.
Dominion Energy
If you are looking for a high-yielding utility stock that provides a steady income, then consider Dominion Energy. The stock has seen a nearly 12% increase over the previous year, with a 3.3% dividend rate. This yield is lower that the average utility sector yield (3.75%). The dividend will likely grow over time as the company is reliable.
Dominion Energy forecasts a 14% revenue increase during the current financial year. Dominion Energy has a $37B capital expenditure plan, which will drive 6.5% annual earnings growth from 2026 to 2026. Most of the money will be used for developing solar and wind farms. This money will enable the company to evolve its operations in response to climate change trends and emission reductions.
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. The company is in a good position going into 2022 with a light regulatory calendar.
Investors have plenty of opportunities to grow in uncertain markets because of the company's size and geographical diversification. Additionally, the company has a long history of dividend growth and plans to spin off its previously acquired companies. 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 has a strong dividend payout of 3.1% and a valuation in excess of $8.8billion. Another utility stock that is well-positioned for future growth is Otter Tail Corporation, which has exposure to electricity distribution and PVC pipe manufacturing. It also owns a business in parts stamping, manufacturing.
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (BIP), a global infrastructure company, owns and manages assets in the energy and transport, midstream and data sectors. The company has 61,000 km in electricity transmission lines and 4200 km of natural-gas pipelines. There are also 7.3 million connections with electricity and gas networks. It also has interests in data centers, water heaters, and rail operations.
Investors will benefit from the steady growth of Brookfield Infrastructure Partners' operations. This company has a track record of making sound investments, and it is comfortable with its dividend payouts. It continues to reap the benefits of its infrastructure investments.
American States Water
American States Water is a great utility company to invest in. It has a long history of increasing dividends. This dividend stock is one of the most reliable, as it has increased its dividend every year for the past 68. Management expects dividend growth of 7-10% annually until 2026. Its cash flow has been extremely steady which makes it a good 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 diverse business model gives the company recurring revenue and growth possibilities. This is important for long term growth and diversification.