Federal Reserve Won't Raise Rates: 4 Big Dividend Utility Stocks to Buy Now

Infrastructure

Published: January 29, 2016 9:25 am

Last Updated: January 13, 2020 2:11 pm

Needless to say with the January Federal Reserve meeting out of the way, we know that rates will stay where they were lifted to in December. And you know what? There is a very good chance that they stay there for the rest of 2016. The stock market is poised for the worst start to the year since the dreadful 2009 beginning, volatility has spiked, oil is still in trouble and most on Wall Street think growth will be tepid this year at best.

So what to yield hungry investors do now? Go back to the well that worked so good between 2009 and 2013 and buy the top utility stock for safety, sold growth and best of all solid dependable dividends. Deutsche Bank highlights the sector in a new report, with earnings starting this week and running through early February.

We screened the Deutsche Bank utility universe for the four highest yielding companies rated Buy. They all make good sense for conservative portfolios looking for income.

CMS Energy

This stock offers a solid dividend and good upside potential. CMS Energy Corp. (NYSE: CMS) is a Michigan-based company that has an electric and natural gas utility as its primary business and also owns and operates independent power generation businesses. Most Wall Street analysts feel the stock should trade in line with peers, reflecting what they view as above average total prospects spurred on by an extensive pipeline of infrastructure investments supported by a constructive regulatory environment.

The CMS Energy board of directors recently increased the quarterly dividend on the company’s common stock by 7% to $0.31 per share. The first-quarter dividend for the common stock is payable Feb. 29, 2016, to shareholders of record on Feb. 5, 2016.

CMS investors receive a 3.32% divided. The Deutsche Bank price target for the stock is $40, and the Thomson/First Call consensus price target is $38. Shares closed Thursday at $37.87.