Treasury Yields Are Crushing Dividend Stocks. These 5 Could Be October Opportunities

The 10-year Treasury yield rose from 4.77% on Sept. 3 to 5.29% on Sept. 30, and income stocks sold off with it. That pushed down prices on five dividend payers that share one income angle: fee-based pipeline contracts and regulated power rates that fund growing dividends, while capital spending shifts toward LNG exports and data-center electricity demand. All five yields below sit under the Treasury, so the case for each depends on dividend safety and growth. Here is how the payouts hold up.

Williams Companies: Pipeline Payout Raised Every Year Since 2018

Williams Companies (NYSE:WMB | WMB Price Prediction) pays an annualized forward dividend of $2.10 per share. At $69.30, that works out to a forward yield of about 3.03%. Shares slipped 7.22% over the past month, and they are still up 17.8% year to date.

Dividend Safety Check

The quarterly dividend went from $0.30 in 2017 to $0.34 in 2018, and Williams has raised it every year since. The latest step was from $0.50 to $0.525 in 2026. For a pipeline company, cash flow says more about coverage than earnings do. Williams guided to 2026 AFFO of $6.085 billion to $6.315 billion, while the dividend costs roughly $2.57 billion a year. At the midpoint, AFFO covers the payout about 2.4 times. Measured against trailing EPS of $2.55, the payout ratio is about 82%. Management expects pro-forma leverage of 3.75x debt to EBITDA.

Bull Case

Williams raised its 2026 adjusted EBITDA guidance to $8.3 billion to $8.5 billion after agreeing to buy Momentum Midstream for up to $5.5 billion. The deal adds more than 4,000 miles of Haynesville pipe. Management also raised its long-term EBITDA growth target to 11% plus compound annual growth through 2030. On the August call, an executive said: “We do feel well-positioned to exceed 11%.” Phase one of its Socrates power project began delivering 200 megawatts to a data-center customer, and management calls the years ahead “the decade of pipe and power.” Analysts are bullish: 22 of 24 rate it a buy or strong buy, with a consensus target of $85.46.

Risk to Weigh

Growth is expensive. Williams plans $7.3 billion to $7.9 billion of 2026 growth capex. Second-quarter capex of $1.834 billion was higher than operating cash flow of $1.376 billion. The Momentum deal also includes $2 billion of equity, which adds shares. At a forward P/E of 27, it is the most highly valued stock on this list.

Kinder Morgan: Highest Yield on the List, Backed by Free Cash Flow

Kinder Morgan (NYSE:KMI) pays $1.19 a year on an annualized basis. At $30.42, the forward yield is about 3.91%, the highest of these five. Shares fell 5.23% over the past month. CNBC’s Jim Cramer supported the stock in his Sept. 30 lightning round.

Dividend Safety Check

Second-quarter free cash flow was $978 million, compared with a quarterly dividend spending of roughly $662 million. That covers the payout about 1.48 times. Net debt was 3.6x adjusted EBITDA, the low end of the company’s target range, and Moody’s upgraded Kinder Morgan to Baa1 earlier this year. Against the 2026 budget of $1.36 in adjusted EPS, the payout ratio is 87.5%. Management expects to beat that EPS budget by more than 12%. The dividend has gone up in every year from 2021 through 2026, most recently to $0.2975 per quarter.

Bull Case

Natural gas transport volumes rose 7% year over year. Kinder Morgan’s project backlog stands at $9.6 billion, with 92% in natural gas and more than 60% tied to power generation and local distribution demand. Second-quarter adjusted EPS of $0.37 beat the $0.3128 estimate, and adjusted EBITDA grew 12% to $2.20 billion.

Risk to Weigh

Kinder Morgan has cut its dividend before. The quarterly payout dropped from $0.51 in late 2015 to $0.125 in 2016. Recent raises have been small: the latest increase was 2%. Refined products volumes also fell 5%, and crude and condensate volumes fell 16%.

Duke Energy: Carolinas Utility Near Its 52-Week Low

Duke Energy (NYSE:DUK) pays an annualized $4.34 per share. At $113.49, the forward yield is about 3.82%. The stock trades close to its 52-week low of $110.99, well under the $136.11 analyst target.

Dividend Safety Check

The quarterly dividend rose to $1.085 from $1.065 in August, and Duke’s records show regular quarterly payments going back to 1999. The payout is about 65% of trailing diluted EPS of $6.64, the most comfortable coverage of the three utilities here. Like most regulated utilities, Duke spends more on its grid than it generates in cash, so earnings coverage and access to capital matter more than free cash flow. Duke closed $5.3 billion of strategic transactions in the first quarter, which strengthened its funding position.

Bull Case

Duke reaffirmed 2026 adjusted EPS guidance of $6.55 to $6.80 and targets 5% to 7% annual adjusted EPS growth through 2030. It has signed 7.6 GW of economic-development projects under electric service agreements, and retail electric customers grew 1.4%. Second-quarter adjusted EPS of $1.43 beat the $1.3062 estimate. At a forward P/E of 16, Duke is the cheapest utility on this list.

Risk to Weigh

Interest expense and depreciation are rising as the asset base grows. Coal-ash remediation costs remain uncertain, and data-center load could come in below expectations.

Southern Company: Data Centers Are Lifting Commercial Power Sales

Southern Company (NYSE:SO) pays an annualized $3.04 per share. At $83.20, the forward yield is about 3.65%. Shares are down 9.34% over the past year and sit close to the 52-week low of $81.69.

Dividend Safety Check

Southern raised its quarterly dividend in every year from 2021 through 2026, from $0.64 to the current $0.76. The payout is about 73% of trailing EPS of $4.15, which is normal for a regulated utility. Earnings power is growing: second-quarter GAAP net income rose 33.41% to $1.174 billion.

Bull Case

Commercial electricity sales rose 7.3% on data-center demand, and wholesale sales climbed 9.2%. Adjusted EPS of $1.13 beat the $1.00 estimate. With Vogtle fully in service, Georgia Power has a larger rate base to earn on. The forward P/E of 17 is below the trailing figure of 20, which means analysts expect earnings to grow.

Risk to Weigh

First-quarter interest expense reached $778 million, up from $714 million, and Southern Power expects about $205 million in remaining pre-tax repowering charges in 2026. Analysts are cautious too: 13 rate the stock a hold and 3 rate it a sell or strong sell.

OGE Energy: Ex-Dividend Date Is Days Away

OGE Energy (NYSE:OGE) pays an annualized $1.715 per share. At $45.67, the forward yield is about 3.76%. Its newly raised $0.42875 quarterly dividend goes ex-dividend on Oct. 5 and will be paid on Oct. 30.

Dividend Safety Check

OGE’s records show a dividend increase every year since 2015, when the quarterly payout was $0.25. The annualized dividend equals about 71% of 2026 EPS guidance of $2.43. On the July call, CFO Chuck Walworth said: “We have completed all planned financing activities for 2026 and continue to target credit-supportive metrics including maintaining FFO to debt of approximately 17% over the planning horizon.”

Bull Case

OGE set a new all-time peak load of more than 6,800 megawatts. It filed a Google special contract in Oklahoma on May 1 and has six or seven large-load negotiations underway. Its proposed large-load tariff requires data centers to pay 100% of their grid connection costs upfront and sign a minimum 15-year commitment, which protects existing ratepayers. OGE expects to add 550 megawatts of capacity in 2026.

Risk to Weigh

Dividend growth has nearly stalled. The latest raise was about 0.88%. Weather also affects results: first-quarter net income fell 19.94% after a mild winter. With a market cap of $9.43 billion, OGE is also much smaller and less diversified than Duke or Southern.

Five Payouts Funded by America’s Growing Power Demand

The jump in Treasury yields to 5.29% drove these five stocks lower, while the contracts and rate bases that pay their dividends stayed intact. Williams and Kinder Morgan move the natural gas that LNG terminals and new power plants need. Duke, Southern, and OGE sell the electricity that data centers and new factories use. Kinder Morgan’s free cash flow coverage and Duke’s 65% payout ratio stand out as the strongest dividend protection in the group, while Williams offers the fastest growth behind its payout.

The data-center power build is the thread tying these five payouts together, and the chip names are only part of that trade. We featured seven suppliers on the power, cooling, and networking side of the AI expansion in a free report you can download here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).

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