In this article, we discuss the 5 best utilities stocks to buy for dividends. If you want to read about some more utility stocks to buy for dividends, go directly to 10 Best Utilities Stocks to Buy for Dividends.
5. Black Hills Corporation (NYSE:BKH)
Number of Hedge Fund Holders: 19
Forward Dividend Yield: 3.01%
Black Hills Corporation (NYSE:BKH) is an electric and natural gas utility company. The firm has an impressive dividend history that stretches back five decades. It has grown the dividend payout consistently for the past fifty years. On January 26, the company declared a quarterly dividend of $0.595 per share, in line with previous. In earnings results for the fourth quarter of 2021, the firm beat market estimates on revenue by over $59 million. The firm has over 1 million natural gas utility customers.
On February 7, Mizuho analyst Paul Fremont upgraded Black Hills Corporation (NYSE:BKH) stock to Buy from Neutral with a price target of $71, citing valuation as one of the primary reasons behind the ratings upgrade.
At the end of the fourth quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $71 million in Black Hills Corporation (NYSE:BKH), compared to 16 the preceding quarter worth $55 million.
4. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 34
Forward Dividend Yield: 3.05%
American Electric Power Company, Inc. (NASDAQ:AEP) operates as an electric public utility holding company. It has stepped up investments in the clean energy sector in recent months to reflect the broader trends in the industry. On March 15, the firm announced that it was seeking proposals for 500 MW of solar power in Indiana or Michigan and 800 MW of wind energy in those two states along with Illinois or Ohio. The company already operates five solar farms and expects a number of new renewable facilities to be online by 2024.
On March 29, Mizuho analyst Paul Fremont kept a Buy rating on American Electric Power Company, Inc. (NASDAQ:AEP) stock and raised the price target to $104 from $94, highlighting that the updated ratings reflected the higher capital spending and the reallocation of investments from renewables to the transmission business.
At the end of the fourth quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $827 million in American Electric Power Company, Inc. (NASDAQ:AEP), compared to 36 in the previous quarter worth $751 million.
3. Dominion Energy, Inc. (NYSE:D)
Number of Hedge Fund Holders: 34
Forward Dividend Yield: 3.07%
Dominion Energy, Inc. (NYSE:D) produces and distributes energy. On March 16, the company announced that authorities in Virginia had approved a large expansion of existing solar and wind energy storage projects. The expansion will provide 1,000 MW of carbon-free electricity. This is enough to power 250,000 homes in Virginia at peak output. The expansion plan includes work on 15 different projects. The work on the expansion is expected to be completed by 2023 and helps the firm on the path to net zero greenhouse gas emissions.
In early January, UBS analyst Ross Fowler upgraded Dominion Energy, Inc. (NYSE:D) stock to Buy from Neutral and raised the price target of $98 from $81, underlining that the stock was “undervalued” relative to the long-dated regulated rate base growth and “clean regulatory calendar”.
Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Dominion Energy, Inc. (NYSE:D) with 3.6 million shares worth more than $284 million.
2. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 22
Forward Dividend Yield: 3.22%
Consolidated Edison, Inc. (NYSE:ED) has interests in the electric, gas, and steam delivery businesses. The company posted earnings for the fourth quarter of 2021 on February 17, reporting earnings per share of $1, beating market estimates by $0.14. The revenue over the period was $3.4 billion, up more than 15% year-on-year and beating analyst estimates by $510 million. The company said it expected earnings per share of around $4.6 in fiscal year 2022 against analyst estimates of $4.48.
On March 10, Mizuho analyst Anthony Crowdell kept a Buy rating on Consolidated Edison, Inc. (NYSE:ED) stock and raised the price target to $94 from $90, noting that the price target was raised to reflect current market multiples in relation to the firm.
At the end of the fourth quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $323 million in Consolidated Edison, Inc. (NYSE:ED), compared to 24 in the preceding quarter worth $364 million.
1. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 36
Forward Dividend Yield: 3.44%
Duke Energy Corporation (NYSE:DUK) operates as an energy firm. The company recently announced that it would be seeking a rate hike from the North Carolina Utilities Commission as part of an annual adjustment of the cost of fuel used to power the region. If the new rates are approved, the average bill of residential customers will increase by around 6.6%. The firm is also considering investments in small-scale nuclear reactors as part of a plan to reduce carbon emissions. The company is a reliable dividend player having grown the payout consistently in the past eleven years.
On April 7, KeyBanc analyst Sophie Karp maintained an Overweight rating on Duke Energy Corporation (NYSE:DUK) stock and raised the price target to $119 from $110, noting that the firm was “well positioned as a core utility investment” and warranted a “premium to large cap peers” given tailwinds in customer growth in the sector.
At the end of the fourth quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Duke Energy Corporation (NYSE:DUK), up from 32 in the preceding quarter worth $687 million.
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