Investing

5 Big Dividend Paying Utility Stocks To Buy Right Now

Lee Jackson

Published: March 18, 2024 2:15 pm

After an incredible year like 2023 and a solid first quarter this year, many investors are probably still taking the proverbial victory lap, and with good reason. However, the tide could be turning after the January and February consumer and producer index reports came in hotter than expected, indicating that inflation remains sticky.

While interest rates probably start to come down, which could be as late as the fall given the continued inflation pressure, one sector that was a victim of rising rates last year may be a benefactor if they indeed decline later this year: utility stocks. Everyone needs power, regardless of economy, and some of the top utility stocks deliver big and dependable dividends.

We screened our 24/7 Wall St. utility stock research and found five top companies that are buy-rated on Wall Street and pay significant and reliable dividends to shareholders. All are rated Buy by top Wall Street firms.

American Electric Power

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This industry-leading utility pays investors a hefty 4.29% dividend. American Electric Power Co., Inc. (NYSE: AEP) is an electric public utility holding company that generates, transmits, and distributes electricity for sale to retail and wholesale customers in the United States.

It operates through

• Vertically Integrated Utilities
• Transmission and Distribution Utilities
• AEP Transmission Holdco
• Generation & Marketing segments

The company generates electricity using:

• Coal
• Lignite
• Natural gas
• Renewable energy
• Nuclear energy
• Hydro,
• Solar energy
• Wind and other energy sources

It also supplies and markets electric power wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants.

Consolidated Edison

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This old-school utility stock offers income investors the stability and track record many now seek, as well as a solid 3.73% dividend. Consolidated Edison Inc. (NYSE: ED), through its subsidiaries, operates regulated electric, gas, and steam delivery businesses in the United States.

It offers electric services to approximately:

• 3.6 million customers in New York City and Westchester County
• Gas to about 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County
• Steam to approximately 1,530 customers in parts of Manhattan

The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey and gas to about 0.1 million customers in southeastern New York.

In addition, it operates:

• 543 circuit miles of transmission lines
• 15 transmission substations
• 63 distribution substations
• 87,951 in-service line transformers
• 3,869 pole miles of overhead distribution lines
• 2,320 miles of underground distribution lines
• 4,359 miles of mains
• 377,741 service lines for natural gas distribution

Consolidated Edison owns, develops, and operates renewable and energy infrastructure projects, provides energy-related products and services to wholesale and retail customers, and invests in electric and gas transmission projects.

Duke Energy

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This is an excellent idea now, as it is located in a growing part of the country and pays a hefty 4.33% dividend. Duke Energy Corporation (NYSE: DUK) and its subsidiaries operate as energy companies in the United States.

It operates through two segments:

• Electric Utilities and Infrastructure (EU&I)
• Gas Utilities and Infrastructure (GU&I).

The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest and

To develop electricity, Duke Energy uses the following:

• Coal
• Hydroelectric
• Natural gas
• Oil
• Solar and wind sources
• Renewables
• Nuclear fuel

This segment also sells electricity to municipalities, electric cooperative utilities, and load-serving entities.

The GU&I segment distributes natural gas to

• Residential
• Commercial
• Industrial
• Power generation natural gas customers

The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.

Exelon

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This top utility stock makes good sense now for conservative accounts and pays a dependable 4.16% dividend. Exelon Corporation (NYSE: EXC) is a utility services holding company that operates energy distribution and transmission businesses in the United States and Canada.

The company purchases and regulates the retail sales of electricity and natural gas and the transmission and distribution of these products to retail customers.

It also offers support services, including:

• Legal
• Human resources
• Information technology
• Supply management
• Financial
• Engineering
• Customer operations
• Distribution and transmission planning
• Asset management
• System operations
• Power procurement services

The company serves:

• Distribution utilities
• Municipalities
• Cooperatives
• Financial institutions
• Commercial, industrial, governmental, and residential customers.

Southern Company

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This large-cap utility leader pays a solid 4.05% dividend. Southern Company (NYSE: SO), through its subsidiaries, engages in the generation, transmission, and distribution of electricity.

It operates through three segments:

• Gas Distribution Operations
• Gas Pipeline Investment
• Gas Marketing Services

The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations.

Southern Company serves approximately 8.8 million electric and gas utility customers and offers digital wireless communications and fiber optics services.