What is the best utility company to invest in?
Unless you are comfortable with that valuation risk, you should avoid overweighting utility stocks in your portfolio, even if you are investing in utilities as a way to protect your portfolio from downside stock-price risk.
- NextEra Energy NEE.
- Evergy EVRG.
- NiSource NI.
- WEC Energy Group WEC.
- Duke Energy DUK.
- Portland General Electric POR.
- Entergy ETR.
- Alliant Energy LNT.
| Ticker | Company | Performance (Year) |
|---|---|---|
| NRG | NRG Energy Inc. | 103.50% |
| PEG | Public Service Enterprise Group Inc. | 7.96% |
| ATO | Atmos Energy Corp. | 5.48% |
| PCG | PG&E Corp. | 4.69% |
Unless you are comfortable with that valuation risk, you should avoid overweighting utility stocks in your portfolio, even if you are investing in utilities as a way to protect your portfolio from downside stock-price risk.
- Best High-Yield Dividend Stocks: Black Hills Corp. (BKH) ...
- Duke Energy (DUK) the duke energy logo. ...
- Entergy (ETR) ...
- Dominion Energy (D) ...
- American Electric Power (AEP) ...
- WEC Energy Group (WEC) ...
- NextEra Energy (NEE)
| Stock | Implied upside from April 25 close* |
|---|---|
| Tesla Inc. (TSLA) | 23.4% |
| Mastercard Inc. (MA) | 19% |
| Salesforce Inc. (CRM) | 20.8% |
| Advanced Micro Devices Inc. (AMD) | 30.1% |
- Elastic N.V. (NYSE:ESTC) P/E Ratio: 214.81. Quarterly Revenue Growth: 19.45% ...
- CrowdStrike Holdings, Inc. (NASDAQ:CRWD) ...
- Shopify Inc. (NYSE:SHOP) ...
- Vertiv Holdings Co (NYSE:VRT) P/E Ratio: 67.30. ...
- Mercadolibre, Inc. (NASDAQ:MELI) ...
- ServiceNow, Inc. (NYSE:NOW)
Final verdict. The utilities sector has plenty of stocks with attractive dividend yields and the possibility of generating robust long-term gains for investors. Utility stocks may be a particularly attractive option in 2024 given market expectations for falling interest rates.
Entergy Corporation (NYSE:ETR)
The American integrated energy company has raised its dividends for consecutive nine years and it offers a quarterly dividend of $1.13 per share. The stock's dividend yield on January 26 came in at 4.56%.
When the hard landing hit the utilities sector's performance turned negative. However, against a backdrop of overall falling equity markets during a recession, utilities actually outperformed the S&P 500 across all of those hard landing scenarios.
Does Warren Buffett own utility stocks?
Warren Buffett made a fortune by investing in electric utilities in the western U.S. Now, the world's best-known investor says wildfires might undermine that strategy. PacifiCorp, a utility company owned by Buffett's Berkshire Hathaway BRK.
Stock dividends from utility companies often prove to outyield other fixed-income investments and have less volatility than other equities. Utilities tend to be very resistant to economic cycles because demand for utilities does not change much compared with most other industries, even in the deepest recessions.
NextEra Energy was the leading electric utility in the U.S. as of June 2023, based on market value, at almost 153 billion U.S. dollars. Georgia-based electric utility Southern Company ranked second at that time, with a market value of roughly almost 82 billion dollars.
Utility stocks have long been appreciated by investors for their defensive capabilities, particularly during times of market volatility. These stocks are renowned for their higher dividends and reduced volatility compared to growth stocks.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
The rapid rise in interest rates by the Federal Reserve caused a drag on utility earnings. Utility borrowing costs rise because they are capital-intensive and rely heavily upon debt financing. Utilities end up taking a hit on earnings. Also, income investors sour on utilities as bond rates look more attractive.
| Stock | 2024 return through March 31 |
|---|---|
| MicroStrategy Inc. (MSTR) | 169.9% |
| SoundHound AI Inc. (SOUN) | 177.8% |
| Vera Therapeutics Inc. (VERA) | 180.4% |
| Avidity Biosciences Inc. (RNA) | 182% |
| Company | Performance (Year) |
|---|---|
| New Oriental Education & Technology Group Inc. ADR | 126.47% |
| Tidewater Inc. | 124.00% |
| Construction Partners Inc | 114.85% |
| Weatherford International plc | 112.99% |
| Company (ticker) | Analysts' consensus recommendation score | Analysts' consensus recommendation |
|---|---|---|
| Amazon.com (AMZN) | 1.30 | Strong Buy |
| Microsoft (MSFT) | 1.32 | Strong Buy |
| Delta Air Lines (DAL) | 1.35 | Strong Buy |
| Nvidia (NVDA) | 1.38 | Strong Buy |
| Stock | Trailing annual dividend yield* |
|---|---|
| AT&T Inc. (T) | 6.3% |
| Verizon Communications Inc. (VZ) | 6.3% |
| Healthpeak Properties Inc. (DOC) | 6.6% |
| Altria Group Inc. (MO) | 8.8% |
What is the most profitable stock ever?
- Coca-Cola. (NASDAQ: KO) ...
- Altria. (NASDAQ: MO) ...
- Amazon.com. (NASDAQ: AMZN) ...
- Celgene. (NASDAQ: CELG) ...
- Apple. (NASDAQ: AAPL) ...
- Alphabet. (NASDAQ:GOOG) ...
- Gilead Sciences. (NASDAQ: GILD) ...
- Microsoft. (NASDAQ: MSFT)
AMZN Analyst Recommendation Trends
In the current month, AMZN has received 81 Buy Ratings, 0 Hold Ratings, and 0 Sell Ratings. AMZN average Analyst price target in the past 3 months is $212.41.
Utility stocks have been the worst-performing sector in 2023. But there's a silver lining for investors looking to put money to work in these dividend-paying companies: Many are in undervalued territory, according to Morningstar analysts. Not only that, but the sector is also offering attractive income potential.
Electric utility stocks are publicly traded companies regulated by government agencies. They make money by providing reliable energy to customers. Here's a closer look at how to invest in the electric utility industry.
| Stock | Dividend yield | Dividend growth streak |
|---|---|---|
| Walmart Inc. (WMT) | 1.4% | 50 years |
| Procter & Gamble Co. (PG) | 2.4% | 68 years |
| 3M Co. (MMM) | 6.5% | 65 years |
| Coca-Cola Co. (KO) | 3.3% | 61 years |
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