In this article, we are going to discuss the 15 utility stocks with highest dividends.
As of the writing of this piece, the S&P Utilities index has surged by 7.16% since the beginning of 2026. This compares to a decline of 3.52% posted by the overall S&P 500 during the period.
According to the analysts at Jefferies, the US utilities sector is not expected to be directly impacted by the conflict in Iran, as the ongoing AI boom and ballooning data center demand continue to drive growth. Traditionally known as a safe-haven sector, utilities are typically less cyclical and have performed well across various economic backdrops. Many industry players operate under contracted or regulated pricing, offering predictable cash flows and often above-average dividends to investors. This makes them particularly attractive for retirement and income-focused investors, as well as those seeking more defensive holdings.
The US electricity demand surged to a record high in 2025 and remains on track to achieve further growth also in 2026 and 2027. This positions the utilities sector well to continue delivering strong growth and also sustain its high shareholder returns in the future.
With that said, here are the Utility Stocks with the Highest Dividends to Buy Now.
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Our Methodology
To collect data for this article, we referred to several stock screeners to find utility stocks that had an annual dividend yield of at least 3% as of April 7, 2026. The following are the Utility Stocks with the Highest Dividends. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
15. ONE Gas, Inc. (NYSE:OGS)
Dividend Yield as of April 7: 3.04%
ONE Gas, Inc. (NYSE:OGS) provides natural gas distribution services to more than 2.3 million customers in Kansas, Oklahoma, and Texas.
On March 23, Morgan Stanley analyst David Arcaro bumped the firm’s price target on ONE Gas, Inc. (NYSE:OGS) from $79 to $84, while maintaining an ‘Equal Weight’ rating on the shares.
The revision comes as Morgan Stanley updated the price targets for the North American Regulated & Diversified Utilities / IPPs under its coverage. The overall utilities sector surged by almost 22% in February, compared to gains of just under 14% posted by the broader market.
Moreover, the analyst firm believes that the recent discussions in the utilities sector have been overall constructive, with industry players highlighting growth opportunities and expressing optimism regarding load growth. Additionally, a number of companies have also signed multi-year deals with data centers, further adding to the positive outlook.
ONE Gas, Inc. (NYSE:OGS) also remains optimistic, with a target to grow its long-term adjusted net income by 7% to 9% and adjusted EPS by 5% to 7%, using adjusted 2025 actual results as the baseline for 2026–2030.
14. The Southern Company (NYSE:SO)
Dividend Yield as of April 7: 3.06%
The Southern Company (NYSE:SO) is one of the largest producers of electricity in the United States and the largest wholesale provider in the Southeast. Together with its subsidiaries, the company delivers clean, safe, reliable, and affordable energy to its 9 million customers.
On March 23, Morgan Stanley increased its price target on The Southern Company (NYSE:SO) from $91 to $94, while keeping an ‘Underweight’ rating on the shares.
The revision comes after Morgan Stanley updated its estimates for the North American Regulated & Diversified Utilities / IPPs under its coverage. The utilities sector delivered a strong performance in February, with gains of almost 22%, against a surge of just under 14% delivered by the overall market. Moreover, the analyst highlighted that the recent discussions in the space have been constructive overall, with industry players expressing optimism over growth opportunities and load growth. A number of utilities have also recently signed long-term data center deals with tech giants, further adding to the bullish sentiment.
To keep up with the growing demand, The Southern Company (NYSE:SO) announced in February that it had raised its capital investment plan to $81 billion over the next 5 years, up almost 30% from its guidance last year.
