Best Utility Stocks To Buy Now
U.S. News & World Report - "The passage of the Inflation Reduction Act is a game changer for electric utilities in the U.S., and investors may come to look at them differently than simply defensive holdings." said Roger Mortimer in U.S News on seven utility stocks to watch for.
best utility stocks to buy now
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Cramer advised investors to consider adding shares of "steady-eddy" utility companies to their portfolios for their dependability. "They also tend to protect you with bountiful dividends that can cushion any potential downside," he said.
The remaining list of stocks contains dividend-paying utility stocks with price-to-earnings ratios less than 15. As you can see, there are relatively few securities (at the time of this writing) that meet this strict valuation cutoff.
Large-cap stocks are loosely defined as businesses with a market capitalization above $10 billion and are perceived as lower risk than their smaller counterparts. Accordingly, screening for large-cap stocks with high dividend yields could provide interesting investment opportunities for conservative, income-oriented investors.
The remaining stocks in this list are those with market capitalizations above $10 billion and dividend yields above 3%. This narrowed investment universe is suitable for investors looking for low-risk, high-yield securities.
You now have a solid fundamental understanding of how to use the Utility Dividend Stocks Excel Spreadsheet List to its fullest potential. The remainder of this article will discuss the characteristics that make the utility sector attractive for dividend growth investors.
One characteristic that does not describe utility stocks is high growth. One of the regulatory constraints imposed upon utility companies is the pace at which they can increase the fees paid by their customers.
Portland General Electric is an electric utility based in Portland, Oregon. The company is on the smaller side, as it provides electricity to nearly 900,000 customers and 2 million residents in 51 cities.
Evergy is an electric utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri. Through its subsidiaries Evergy Kansas, Evergy Metro and Evergy Missouri West, the company serves approximately 1.4 million residential customers, nearly 200,000 commercial customers and 6,900 industrial customers and municipalities in Kansas and Missouri. Evergy has a market capitalization of $15 billion and is significantly impacted by seasonality, as about one-third of its retail revenue is recorded in the third quarter.
Evergy has grown its earnings-per-share at a 5.7% average annual rate over the last decade. This mid-single digit growth rate is typical in the utility sector. However, Evergy has enhanced its investments in growth projects lately and hence it is likely to accelerate its growth pattern in the upcoming years. The company expects to spend $10.7 billion on capital expenses in 2022-2026 while it will also reduce its operational and maintenance expenses.
The subsidiaries of Evergy operate on a fully regulated retail utility model in Missouri and Kansas and thus they do not face any competition in these markets. This typical utility model, which generates reliable and growing earnings, is undoubtedly a strong competitive advantage
UGI Corporation is a gas and electric utility that operates in Pennsylvania, in addition to a large energy distribution business that serves the entire U.S. and other parts of the world. It was founded in 1882 and has paid consecutive dividends since 1885. It should generate about $8.2 billion in revenue this year. The company operates in four reporting segments: AmeriGas, UGI International, Midstream & Marketing, and UGI Utilities.
On August 10th, 2021, Spark Energy (SPKE) changed its name to Via Renewables (VIA) to reflect its direction to renewable energy. It is an independent retail energy services company founded in 1999. The organization provides residential and commercial customers with alternative choices for their natural gas and electricity. Via Renewables is headquartered in Houston, Texas, and currently operates in 19 states and serves 102 utility territories. Via Renewables has a market cap of $189 million and executed its initial public offering in 2014.
As a small-cap energy business, Via Renewables tends to be more volatile than most large cap stocks. To provide a perspective, the stock is 56% off its peak posted about five years ago. Moreover, the stock could underperform the market during sell-off periods. In the sell-off triggered by the pandemic, the stock plunged -50% whereas the S&P 500 fell -35%. Furthermore, Via Renewables is not followed by analysts and provides little information in its reports.
That said, we expect that the stock will provide annual returns of 22.2% over the next five years due to 6.0% earnings growth, the yield of 13.9%, and an 8.7% contribution from multiple expansion. We note that the stock might be best suited for those with a higher tolerance for risk.
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While it may not have the years behind it, Hydro One (TSX:H) is another solid company among utility stocks that I would consider. Hydro One stock continues to be the choice of Ontario residents for their utilities. And there are a few benefits to this.
Meanwhile, Hydro One stock is one of the utility stocks on the TSX today trading up 13.61% in the last year, providing protection and growth. Then you can bring in an additional dividend yield at 3.17%.
I would continue to avoid Algonquin Power & Utilities (TSX:AQN) among utility stocks for now. The company was forced to cut back its dividend in the recent past, thereby ending its Dividend Aristocrat status. It also remains down by about 40% in the last year, plummeting last November.
Utility stocks are companies that provide basics like gas, water, and electricity. One of the most sought-after stocks, utility stocks can never fail. Because the demand for the basics they provide is never-ending. With every passing day, these utilities are becoming a necessity rather than a comfort. No doubt they come with their set of pros and cons and have risks attached to them. But they are amongst the most competitive and stable sources of investment.
Duke Energy Corporation is American electric power and natural gas holding company. Its electric utilities serve 8.2 million customers. Duke collectively owns 50,000 megawatts of energy capacity. Its natural gas unit serves a total of 1.6 million customers. Oil stocks are one of the riskier yet most profit-generating sectors.
The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. There are many trading blogs designed for individual investors that are interested in choosing individual buzzing stocks.
NiSource is an energy holding company that operates as a regulated natural gas and electric utility company. It serves approximately 3.2 million natural gas customers and 500,000 electric customers across six states. It operates through two segments:
Black Hills Corporation, operates as an electric and natural gas utility company in the United States. The company serves 1.3 million natural gas and electric utility customers in eight states. It operates in two segments:
The above list of companies has been selected after looking at the past growth pattern and the regular dividend payments. These companies have a strong foundation and good operational capabilities. Since the demand for utilities will never run out, these utility stocks will also continue to grow, But always do your research to avoid any fraud or wrong investment.
Finally, some get involved with parts of the supply chain. For example, an electric utility may produce power but rely on a partnership with another utility to transmit it and sell it. And, vice versa. 041b061a72