With Interest Rates to Remain Low for Years, Buy This Sector for Income and Safety

DTE Energy’s Gas Storage and Pipelines segment owns natural gas storage fields, lateral and gathering pipeline systems and compression and surface facilities. It also has ownership interests in interstate pipelines serving the Midwest, Ontario and northeast markets.

The company’s Power and Industrial Projects segment offers metallurgical coke, pulverized coal and petroleum coke to the steel, pulp and paper, and other industries, as well as power, steam and chilled water production and wastewater treatment services. It also supplies compressed air to industrial customers.

Investors in DTE Energy stock receive a very dependable 3.61% dividend. The BofA Securities has a price objective of $122, while the higher posted consensus target price is $128.78. Friday’s close saw shares trading at $112.03 apiece.

NextEra Energy

With a very strong balance sheet, this company looks poised for a solid finish to 2020. NextEra Energy Inc. (NYSE: NEE) consists of two main business segments: the Florida Power & Light (FPL) regulated utility, and NextEra Energy Resources, a deregulated generator of predominantly wind, natural gas, nuclear and solar powered assets in North America. The company also holds a 65.1% share in the yieldco NextEra Energy Partners.

FPL announced last summer a groundbreaking “30-by-30” plan to install more than 30 million solar panels by 2030 and make the state of Florida a world leader in the production of solar energy. It and NextEra Energy Resources are already the world’s largest producers of renewable energy from the wind and sun. When this plan is completed, FPL expects to be the largest utility owner and operator of solar in America.

Investors receive a very safe and solid 2.02% dividend. The $303 BofA Securities price objective compares with a $289.06 posted consensus figure. NextEra Energy stock closed at $276.92 per share on Friday.

Sempra Energy

This is another solid defensive play. Sempra Energy (NYSE: SRE) is a natural gas transmission and distribution company headquartered in San Diego. The company’s California Utilities segment distributes gas and electricity to approximately 25 million customers in southern California via South California Gas and San Diego Gas and Electric.

Its Cameron LNG project in Louisiana could restart this month if it is able to receive electricity safely, multiple media outlets reported last week. The terminal was temporarily closed in late August due to Hurricane Laura. Cameron LNG also could see power restored at its U.S. Gulf Coast export facility by September 30.

Shareholders are receiving a solid 3.49% dividend. The BofA Securities price objective is $137. The consensus target is up at $144.88, but Sempra Energy stock was last seen trading at $119.98 a share.

While the days of huge capital gains, like the ones posted seven and eight years ago, for the sector are long over, the days of these top utility stocks paying regular and dependable dividends are not. For frustrated income investors with a small degree of risk tolerance, these top companies will continue to deliver income for years and will pay significantly more than CDs or Treasury debt.