Top utilities sector stocks
Every day TheStreet Ratings produces a list of the top rated stocks. These 10 electric utility stocks are rated highest by TheStreet Ratings' value-focused stock rating model. Here's a few ways to scrimp and save. By then, the company expects its reorganization to be approved by a bankruptcy court. Your browser is not supported. Log In.
10 Best Electric Utility Stocks for This Year - Top Stocks - TheStreet Ratings
Utility stocks provide essential services such as electricity, natural gas, and water and wastewater to residential and commercial customers. The steady demand for these services has helped utility stocks historically generate relatively stable earnings. Meanwhile, the rates they charge for delivering these services are either regulated i.
That combination of predictable profitability and income generation makes utility stocks lower-risk options for investors. However, not all utility stocks deliver competitive investment returns. The best utilities share additional noteworthy characteristics that give them the power to outperform. The best investments in a utilities company boast a top-notch financial profile and visible growth prospects.
Each of the below companies meets those criteria, and has the potential to produce above-average total stock returns -- its dividend yield plus its stock price appreciation. It makes most of its money by providing regulated water and wastewater services, with the rest coming from less predictable market-based activities, including services provided to homeowners and the military.
The main driver of its outlook is a multibillion-dollar investment to expand its regulated operations. The water utility has the financial flexibility to support its expansion plan thanks to its top-tier financial profile.
Brookfield Infrastructure operates several utilities and utility-like businesses that generate predictable cash flow. It expects this portfolio to deliver high-single-digit annual earnings-per-share growth over the long term. It also anticipates acquiring new utility-like infrastructure businesses, which should provide an additional earnings boost. Supporting Brookfield Infrastructure's outlook is its top-notch financial profile.
Further, it has a high credit rating for a company in the utility sector. Because of those factors, the company believes it can grow its dividend by an annual rate in the mid-to-high single digits over the long term.
It also owns a non-regulated competitive energy business that operates natural gas pipelines and renewable energy projects that generate predictable income backed by long-term, fixed-rate contracts. Utility infrastructure is costly to build and maintain. Because of that, a utility needs a strong financial profile to invest in maintaining and expanding its infrastructure while also paying an attractive dividend. A bond rating or credit rating for a company is like a credit score for an individual.
That's important for utilities, since they routinely need to borrow money to help fund maintenance and expansion projects. So investors should seek out companies with high bond ratings, since they can more easily finance their operations, which helps them grow their earnings and dividends. Utilities need to borrow money to finance maintenance and expansion projects.
But having too much debt limits their ability to grow. Because of that, investors should look for utilities with conservative leverage metrics for the sector.
A dividend payout ratio is the percentage of a company's profits that it pays out to investors via its dividends.
Utilities with stronger financial profiles have the flexibility to invest in expansion projects and make acquisitions that grow their earnings at an above-average rate. The extra fiscal strength also gives them more power to increase their dividends. Providers of phone, internet, and television services are often attractive to conservative investors.
These utility companies all have top-tier financial profiles. Because of that, they have the flexibility to invest in expanding their operations while also growing their dividends. Those dual growth drivers should give these utilities the power to produce attractive total returns for investors over the long term. Matthew DiLallo. What are the top utility stocks to buy? American Water Works. Brookfield Infrastructure Partners. Brookfield Infrastructure Partners NYSE:BIP owns a diversified portfolio of infrastructure businesses, including: Regulated utilities: Regulated electric and natural gas transmission and distribution businesses and a port terminal.
Transport: Railroads, toll roads, and ports supported by long-term contracts or regulated rates. Energy: Natural gas midstream and distributed energy operations backed by long-term contracts or regulated rates. Data infrastructure: Data centers, cell towers, and fiber-optic cables supported by long-term contracts with customers.
NextEra Energy. Image source: Getty Images. What makes a good utility stock investment? An investment-grade bond rating A bond rating or credit rating for a company is like a credit score for an individual. Low leverage metrics Utilities need to borrow money to finance maintenance and expansion projects.
A conservative dividend payout ratio A dividend payout ratio is the percentage of a company's profits that it pays out to investors via its dividends. Electric utility stocks These companies generate predictable revenue, which makes them attractive to low-risk investors. Telecom stocks Providers of phone, internet, and television services are often attractive to conservative investors.
Energy stocks The production and distribution of energy is a broad industry that is crucial to the economy. The best utility stocks offer above-average growth for less risk These utility companies all have top-tier financial profiles.
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NRG Energy Inc. (NRG). PPL Corp. (PPL).
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The utility sector remains my favorite sector to cover among those in the sector watch lists. A utility stock is the stock of a company that provides a public utility service to its customers.
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Investing in Top Utility Stocks
All rights reserved. It has since been updated to include the most relevant information available. I remember when the dot-com boom was near its height; there were plenty of brokers and financial talking heads saying growth was the new income. They told investors to ditch their boring utilities and total return stocks and get into the growth names. Having rock-solid companies underpin your portfolio may not be sexy, but it is practical and profitable.
Utility Sector Stocks
Investors seeking to buy the best utilities ETFs are usually looking for income, growth, diversification, or some combination of those objectives. Utilities stocks tend to pay above-average dividends, they have good long-term returns, and they can outperform the market during times of volatility. This is why exchange-traded funds ETFs that invest in utilities can be useful investment tools. Utilities ETFs are exchange-traded funds that passively track a benchmark utilities index. Examples of businesses involved in utilities include electric companies, water utilities, gas companies, and energy traders. Large, publicly traded U. This is because, even in difficult times, people still need basic utilities services, such as water and electricity. This yield is based on the day period ending on the last day of the previous month. The yield figure reflects the dividends and interest earned during the period, after the deduction of the fund's expenses, a calculation that is required to be reported by funds to the Securities and Exchange Commission SEC. To find the best utilities ETFs, most investors are wise to look for a combination of yield and low expenses.
Getty Images.
Utility companies provide power—one of the most basic needs of households and industrial enterprises. Below is our Top 10 list by market value of the biggest providers of electricity, natural gas, and multiline power. Interestingly, a majority of them are based in either the U. The costs to build and maintain the infrastructure necessary to produce and distribute energy is one of the greatest challenges facing emerging countries.
What are the top utility shares to watch?
View more search results. Utility companies supply and maintain our daily energy and water needs. Here, we explain why people buy utility stocks, highlight some popular opportunities, and show you how to identify the highest yield utility stocks. Utility stocks are some of the most popular buy and hold stocks on the market. This is because utility stocks often offer high dividends, and they tend to outperform other securities in times of economic uncertainty. Different utility companies provide electricity, gas and water — as well as being responsible for the maintenance of the delivery systems and production hubs. There are a number of different options available for producing and supplying this energy including renewables, nuclear power plants, hydro-electric and tidal power, as well as fossil fuels. However, in the last decade or so, many utility companies have made an effort to shift their means of production away from fossil fuels to cleaner alternatives, after consumer awareness of the damage that fossil fuels do to the environment has increased. Often, the three different definitions of a utility company can apply to one single entity, but other times a company might have chosen to specialise in one of the above — or created subsidiaries to diversify their offering. The below list of utility stocks has been ranked in no particular order, but each company has significant holdings and operations in the utility sector:. Dominion Energy. Dominion is one of the largest utility companies in the US, operating in 18 states across the country. Dominion has a large focus on water, solar, wind, natural gas and biomass methods for generating electricity to meet the utility demands of its customers — with 1. FirstEnergy is an American utility company based in Ohio.
10 Best Utility Stocks to Buy for 2020
Utility stocks provide essential services such as electricity, natural gas, and water and wastewater to residential and commercial customers. The steady demand for these services has helped utility stocks historically generate relatively stable earnings. Meanwhile, the rates they charge for delivering these services are either regulated i. That combination of predictable profitability and income generation makes utility stocks lower-risk options for investors. However, not all utility stocks deliver competitive investment returns. The best utilities share additional noteworthy characteristics that give them the power to outperform.
