The Bullish Bears break down a list of the largest utility stocks and ETFs list. Utility stocks are companies that provide important services like electricity and water. You can invest in them by buying stocks, and they can give you money called dividends. However, investing in utilities can be risky because they have expensive parts and are regulated by the government. They may also be affected by economic cycles and other factors. So, it’s important to consider your goals and the risks before investing in utilities. You can also invest in renewable energy sources like wind turbines and solar panels or cable TV, internet, and phone services.
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Table of Contents
List of the Largest Utility Stocks
| Symbol | Name | Industry |
|---|---|---|
| NEE | NextEra Energy, Inc. | Utilities - Regulated Electric |
| DUK | Duke Energy Corporation | Utilities - Regulated Electric |
| SO | The Southern Company | Utilities - Regulated Electric |
| D | Dominion Energy, Inc. | Utilities - Diversified |
| SRE | Sempra | Utilities - Diversified |
| AEP | American Electric Power Company, Inc. | Utilities - Regulated Electric |
| EXC | Exelon Corporation | Utilities - Diversified |
| PCGU | PG&E Corporation | Utilities - Regulated Electric |
| PCG | PG&E Corporation | Utilities - Regulated Electric |
| XEL | Xcel Energy Inc. | Utilities - Regulated Electric |
| ED | Consolidated Edison, Inc. | Utilities - Regulated Electric |
| PEG | Public Service Enterprise Group Incorporated | Utilities - Diversified |
| WEC | WEC Energy Group, Inc. | Utilities - Regulated Electric |
| ES | Eversource Energy | Utilities - Regulated Electric |
| CEG | Constellation Energy Corporation | Utilities - Renewable |
| AWK | American Water Works Company, Inc. | Utilities - Regulated Water |
| EIX | Edison International | Utilities - Regulated Electric |
| FE | FirstEnergy Corp. | Utilities - Diversified |
| ETR | Entergy Corporation | Utilities - Diversified |
| AEE | Ameren Corporation | Utilities - Regulated Electric |
What Are Utility Stocks?
Utility stocks aren’t always on the list of the hottest investments on the market. Why? For the most part, utility stocks are pretty boring. They’re stable, the industry is highly regulated, and they usually pay out a solid dividend. For a lot of investors, boring sounds just fine.
This sector is one of the safest value sectors to invest in. Even during a recession or economic downturn, people must rely on utilities like natural gas, water, and electricity to survive. No matter how bad the economy is, these are now considered essentials of life for many countries worldwide.
Utility stocks should certainly be on your watchlist if you are looking for dividend income and seeking stability and low volatility in your portfolio. This article will discuss why utility stocks should be a consideration for every long-term investment portfolio in 2024.
Are Utility Stocks a Good Investment?
Utility stocks can check all the boxes for the right type of investor. They are some of the most stable companies you can invest in, and the stocks rarely see volatility. As with most value sectors, utility stocks sacrifice the potential for growth and capital appreciation.
Instead, you usually receive generous dividends and predictable price action that doesn’t rise too high or fall too low. Utility stocks are the perfect investments for income-seeking investors or those looking to retire.
Utility stocks are also considered defensive stocks. They can be seen as safe havens during market volatility compared to other sectors like tech. With all this in mind, here are our choices for some of the best utility stocks to buy in 2024.
NEE Stock Rover Report
List of the Best Utility Stocks
1. NextEra Energy
NextEra Energy is an American energy company providing customers power through several different energy resources. These include electrical, solar, natural gas, nuclear, and wind. It also has a large energy storage division with over 70 GW of power generation.
This is the largest utility company in the world by market capitalization by nearly $25 billion and serves more than 12 million customers in the United States. Not only has NextEnergy’s stock returned more than 30% to investors over the past five years, but that number surges when you include its generous dividend. This stock is a certified Dividend Aristocrat and has paid out distributions for 41 years. Over the past 10 years, the dividend has a CAGR of 11.0%, making it one of the strongest utility stocks.
2. Duke Energy (NYSE: DUK)
Duke Energy is another American energy company with a long history in the United States. The company has operated since 1904 and serves electricity and natural gas to more than 10 million Americans. It is the fifth-largest utility company in the world by market capitalization and the third-largest in America behind NextEra and the Southern Company.
This utility company provides power through various resources. Much of its energy production in the Midwest comes from commodities like oil, natural gas, and coal. Meanwhile, in the Carolinas, Duke focuses on its nuclear power plants. Like NextEra, Duke is a Dividend Aristocrat and has been paying out distributions to shareholders for decades. With a current dividend yield of 4.28%, Duke is an excellent way to add stability and income to your portfolio.
3. The Southern Company (NYSE: SO)
The Southern Company is another American utility giant that provides electricity and natural gas to customers via a combination of coal, gas, nuclear energy, and renewable energy. This company serves over 9 million Americans with more than 43,000 MW of generating capacity. The Southern Company owns several state-regulated utility brands, including Alabama, Georgia, and Mississippi.
If you’re an income investor, the Southern Company is a dividend-paying utility stock that should be on your radar. While it technically isn’t a Dividend Aristocrat, it has raised its dividend for 23 consecutive years. Perhaps even more impressive is that Southern Company has not decreased its dividends for over 75 years. With a yield of 4.05%, it is one of the best dividend utility stocks you can down.
4. Brookfield Infrastructure (NYSE: BIP)
Brookfield Infrastructure is the utility and infrastructure arm of the Brookfield Asset Management conglomerate. Regarding the different divisions of Brookfield to own, BIP has been one of the best-performing assets with a steady growth rate and a generous dividend yield. Over the past five years, BIP has returned more than 35% in value to shareholders and has a dividend yield of 4.82%.
This company owns a wide range of different infrastructure assets. These include over 8,000 power-generating facilities valued at over $78 billion, transportation businesses, data centers, and even midstream commodities distribution.
5. American Water Works (NYSE: AWK)
While most of our other best utility stock picks have been focused on energy, American Water Works is one of the country’s largest water and wastewater companies. It serves clean, drinkable water to over 14 million people across 14 states and 18 military bases. It is the largest regulated water utility in the United States and has operated since 1886.
Not only do you get to invest in a highly regulated industry with a large, established customer base, but you also get to collect a 2.25% dividend yield. In 2023, AWK raised its dividend by 8.02%, and shareholders will look for a similar increase this year. Investors should expect it, as AWK is a Dividend Stalwart with a long yearly history of raising its dividends.
Utility Stocks ETFs List
| Symbol | Name | Industry |
|---|---|---|
| XLU | Utilities Select Sector SPDR Fund | Broad Utilities |
| VPU | Vanguard Utilities ETF | Broad Utilities |
| IGF | iShares Global Infrastructure ETF | Infrastructure |
| PAVE | Global X US Infrastructure Development ETF | Infrastructure |
| NFRA | FlexShares STOXX Global Broad Infrastructure Index Fund | Infrastructure |
| FUTY | Fidelity MSCI Utilities Index ETF | Broad Utilities |
| IFRA | iShares U.S. Infrastructure ETF | Infrastructure |
| IDU | iShares U.S. Utilities ETF | Broad Utilities |
| GII | SPDR S&P Global Infrastructure ETF | Infrastructure |
| RYU | Invesco S&P 500® Equal Weight Utilities ETF | Broad Utilities |
| FXU | First Trust Utilities AlphaDEX Fund | Broad Utilities |
| TOLZ | ProShares DJ Brookfield Global Infrastructure ETF | Infrastructure |
| JXI | iShares Global Utilities ETF | Broad Utilities |
| PUI | Invesco DWA Utilities Momentum ETF | Broad Utilities |
| UTES | Virtus Reaves Utilities ETF | Broad Utilities |
| ECLN | First Trust EIP Carbon Impact ETF | Broad Utilities |
| EMIF | iShares Emerging Markets Infrastructure ETF | Infrastructure |
| PSCU | Invesco S&P SmallCap Utilities & Communication Services ETF | Broad Utilities |
| UTSL | Direxion Daily Utilities Bull 3X Shares | Broad Utilities |
| UPW | ProShares Ultra Utilities | Broad Utilities |
| BLLD | JPMorgan Sustainable Infrastructure ETF | Infrastructure |
| RBLD | First Trust Alerian US NextGen Infrastructure ETF | Infrastructure |
| GLIF | AGFiQ Global Infrastructure ETF | Infrastructure |
| CHIU | Global X MSCI China Utilities ETF | Broad Utilities |
| DOZR | Direxion Daily US Infrastructure Bull 2X Shares ETF | Infrastructure |
| INFR | ClearBridge Sustainable Infrastructure ETF | Infrastructure |
| SDP | ProShares UltraShort Utilities | Broad Utilities |
Final Thoughts: Utility Stocks List
As positive as investing in utility stocks is, they also come with some downside. First and foremost, utility stocks lack the same growth potential as other sectors like tech. These companies are usually well-established and operate in highly regulated industries.
For the most part, regulated industries are a great thing for investments. But keep in mind that these things can change. Government contracts can expire, and large groups of customers can be lost.
Finally, utility companies often need to invest large capital and debt in infrastructure investments. This can hurt the balance sheet, potentially negatively impacting dividend distributions or share buybacks.
