Top 10 Electric Utility Dividend Stocks to Buy

Published May 19, 2021 at 10:39 am EDT Updated August 19, 2026 at 12:02 pm EDT

In this article, we will take a look at the top 10 electric utility dividend stocks to buy.

The COVID-19 outbreak has taken a toll on many industries worldwide resulting in an economic downfall. However, the electric utility industry was able to stay afloat amidst the pandemic. The demand for these services will continue to increase given its recession-resilient and essential nature in providing power to customers worldwide. According to a study from Statista, from 7,323 terawatt-hours in 1980, the global energy demand increased to more than 22,000 terawatt-hours in 2019. Electricity demand is forecast to continue to rise over the next few decades, exceeding 35,000 terawatt-hours by 2040.

According to an article from consulting firm Mckinsey, electricity is rising at a higher rate than any other energy source, with value pools increasing at a rate of 4% each year, or $287 billion, in the decade to 2025.

Electric Utility Trends Under the Biden Administration

Dividend investing has become extremely important, especially in the current age of financial volatility. For long-term income investors who want to avoid uncertainty, dividend cuts or suspensions, experts recommend investing in companies that have been consistently increasing their dividends as well as investing in their core business. These companies include Altria Group Inc (NYSE: MO), Federal Realty Investment Trust (NYSE: FRT) and IBM Common Stock (NYSE: IBM). But in this article we are going to focus on electric utility companies that pay decent dividend yields and also have a strong history. Electric utilities are thriving amid an increasing demand, broadening focus from investors on the back of ESG, renewable energy and changing trends.

The Biden Administration targets to have a carbon-free electricity market and a net-zero-emissions economy by 2050. In line with this, utilities will continue to make significant investments in clean energy foundations, and the electricity market will continue to move into a less centralized standard. For instance, IDACORP, Inc. (NYSE: IDA) set a goal of supplying 100% of its power from carbon-free resources by 2045. In January 2021, the company’s electricity balance already incorporates 45% hydrogen fuel from 17 hydropower generation facilities along the Snake River and its tributaries. IDACORP, Inc. currently offers a dividend yield of 2.82% and posted its net income of $44.8 million in the first quarter of 2021. Shares of IDA jumped 16% over the last twelve months.

Another notable stock moving towards cleaner energy is Avangrid, Inc. (NYSE: AGR). The company fully agreed to sell its fossil fuel assets and established a dedicated renewables subsidiary to maintain all of the company’s power generation. In 2020, Avangrid Renewables’ parent company pledged an $88 billion investment in green energy. Avangrid, Inc. currently offers a dividend yield of 3.42% and posted its revenue of $1.97 billion in the first quarter of 2021. Shares of IDA jumped 27% over the last twelve months.

Another notable company that is making the shift to cleaner energy is Duke Energy Corporation (NYSE: DUK). The company is pursuing an ambitious renewable energy policy to help its consumers produce a more active energy expectation. Duke Energy Corporation targets at least a 50% reduction in carbon emissions by 2030 and net-zero emissions by 2050. By 2025, the corporation expects to purchase 16,000 megawatts (MW) of clean energy sources in the United States.

Electric utility companies like IDACORP, Inc., Avangrid, Inc. and Duke Energy Corporation not only offer safe dividends, they also have thriving business models. That’s why they are included in the list of top electric utility dividend stocks to buy.

AI in the Electric Utility Industry

Innovators worldwide continue to develop innovative solutions to address the increasing demand while moving away from conventional energy production. For instance startup software as a service (SaaS) platform energy provider Innowatts uses artificial intelligence (AI) and data from more than 43 million global meters to help electricity suppliers, distributors, and grid managers unlock meter-level data and simplify business processes. The company’s user base includes Portland General Electric Company (NYSE: POR), Mega Energy, and Avangrid, Inc..

Just like the electric utility markets, the hedge fund industry is also seeing the winds of change. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

top Electric Utility Dividend Stocks to Buy

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Here is our list of the top 10 electric utility dividend stocks to buy with this context in mind.

Top Electric Utility Dividend Stocks to Buy

10. Eversource Energy (NYSE: ES)

Number of Hedge Fund Holders: 24
Total Value of Hedge Fund Holdings: $511 Million
Dividend Yield as of May 19: 2.86%

We start our list of the top 10 electric utility dividend stocks with Eversource Energy (NYSE:ES). Eversource Energy operates as one of the largest energy providers offering electricity, natural gas, and water to over 4.3 million clients in Massachusetts and New Hampshire. In 2018, the company proved its support for electric vehicles and announced plans to invest around $45 million over five years to install 400 electric car charging sites in Massachusetts. In April 2021, the company entered into a partnership with Orsted, a multinational power company in Denmark, to fund $5 million of research projects specific to offshore wind development through Stony Brook’s Advanced Energy Research and Technology Center (AERTC). The stock ranks 10th in the list of top electric utility dividend stocks to buy.

Eversource Energy currently offers a dividend yield of 2.87% and posted its earnings of $366.1 million in the first quarter of 2021. Shares of ES jumped 7% over the last twelve months. On April 20, Credit Suisse maintained an Underperform on Eversource Energy and raised the price target to $89.

Just like Federal Realty Investment Trust, Duke Energy Corporation, Portland General Electric Company, Mega Energy, and Avangrid, Inc., Eversource Energy is one of the best electric utility stocks to buy.

There were 24 hedge funds that reported owning stakes in Eversource Energy at the end of the fourth quarter, up from 20 hedge funds during the third quarter.

9. CMS Energy Corporation (NYSE: CMS)

Number of Hedge Fund Holders: 24
Total Value of Hedge Fund Holdings: $580 Million
Dividend Yield as of May 19: 2.76%

CMS Energy Corporation (NYSE:CMS) ranks 9th on the list of 10 best electric utility dividend stocks to buy. The Michigan-based energy company has over 6 million customers across the 10 million residents in Michigan. As of 2015, 9% of the company’s power comes from renewable energy sources. On April 30, Credit Suisse maintained an Outperform rating on CMS Energy and raised the price target to $70.

CMS Energy Corporation’s (NYSE:CMS) adjusted net income in the first quarter of 2021 came in at $348 million. Shares of EWBC surged 14% over the last twelve months.

There were 24 hedge funds that reported owning stakes in CMS Energy Corporation’s (NYSE:CMS) at the end of the fourth quarter, down from 29 funds a quarter earlier. The total value of these stakes at the end of Q4 is $580 million.

8. Alliant Energy Corporation (NASDAQ: LNT)

Number of Hedge Fund Holders: 29
Total Value of Hedge Fund Holdings: $276 Million
Dividend Yield as of May 19: 2.85%

Ranking 8th in our list of the 10 best bank stocks for dividends is Alliant Energy Corporation (NASDAQ:LNT), a Wisconsin-based public utility holding company that has over 976,985 electric customers in Iowa and Wisconsin. In 2020, the company announced the launching of its first solar project in Wisconsin on the south side of State Highway 151. The 1-megawatt (MW) community solar project is expected to begin installation in the spring and be completed by the end of 2021. The stock ranks 8th in the list of top electric utility dividend stocks to buy.

Alliant Energy Corporation has a market cap of $14.4 billion. Alliant Energy Corporation’s revenue in the first quarter of 2021 came in at $901 million. Shares of LNT surged 24% over the past twelve months. On May 18, Mizuho upgraded Alliant Energy to Buy and raised the price target to $61.

There were 29 hedge funds that reported owning stakes in Alliant Energy Corporation at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $276 million.

7. Edison International (NYSE: EIX)

Number of Hedge Fund Holders: 30
Total Value of Hedge Fund Holdings: $1.44 Billion
Dividend Yield as of May 19: 4.59%

California-based public utility holding company Edison International (NYSE:EIX) ranks 7th on 10 electric utility dividend stocks to buy list. The company was founded in 1886 and has over 15 million customers in a 50,000 square-mile area of central, coastal, and Southern California. Edison International uses at least 46% of clean energy to produce electricity. In 2020, the company via a partnership with Austin Lawrence Gidon expanded into South Africa. The partnership will develop corporate access to international capital markets in South Africa.

Edison International has a market cap of $21.8 billion and currently offers a dividend yield of 4.59%. The company’s net income in the first quarter of 2021 came in at $259 million. On May 18, Morgan Stanley kept its Equal-Weight on Edison and lowered the price target to $72. Like Altria Group Inc, Federal Realty Investment Trust, Duke Energy Corporation and IBM Common Stock, EIX is one of the best dividend stocks to buy.

There were 30 hedge funds that reported owning stakes in Edison International at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $1.44 billion.

6. NRG Energy, Inc. (NYSE: NRG)

Number of Hedge Fund Holders: 31
Total Value of Hedge Fund Holdings: $1.46 Billion
Dividend Yield as of May 19: 3.80%

Minnesota-based American energy company NRG Energy, Inc. (NYSE:NRG) ranks 6th in our list of the top 10 electric utility dividend stocks to buy. NRG Energy, Inc. offers energy generation and retail electricity. The company has over 3.7 million customers in 20 US states and two Canadian provinces. Earlier this year, the company purchased Direct Energy, a North American energy retailer, in a $3.625 billion all-cash transaction. Like Altria Group Inc, Federal Realty Investment Trust, Duke Energy Corporation and IBM Common Stock, NRG is a decent dividend stock to invest in.

NRG Energy, Inc. has a market cap of $8.3 billion. The company’s revenue in the first quarter of 2021 came in at $8.09 million. On March 18, Morgan Stanley maintained an Overweight rating on NRG Energy and lowered the price target to $51.

There were 31 hedge funds that reported owning stakes in NRG Energy, Inc. at the end of the fourth quarter, down from 32 funds a quarter earlier. The total value of these stakes at the end of Q4 is $1.46 billion.

Best Electric Utility Dividend Stocks to Buy

5. The Southern Company (NYSE: SO)

Number of Hedge Fund Holders: 32
Total Value of Hedge Fund Holdings: $400 Million
Dividend Yield as of May 19: 4.10%

Ranking 5th in our list of the top 10 electric utility dividend stocks to buy is The Southern Company (NYSE:SO). The Georgia-based American gas and electric utility company services over 9 million customers through their subsidiaries. The company operates over 2,935 megawatts of solar generating capacity. One of The Southern Company’s major acquisitions was in 2016. The company acquired PowerSecure, an energy technology company, to increase its customer base, extend its size, and broaden the scale of its market. On April 19, the company raised its dividend by 8 cents per share which marked the 20th year in a row that Southern Company increased its common stock dividend.

The Southern Company has a market cap of $67.9 billion and earnings in the first quarter of 2021 of $1.14 billion. On May 18, Morgan Stanley maintained Underweight on Southern Company and lowered the price target to $61.

There were 32 hedge funds that reported owning stakes in The Southern Company at the end of the fourth quarter, up from 25 funds a quarter earlier. The total value of these stakes at the end of Q4 is $400 million.

4. Sempra Energy (NYSE: SRE)

Number of Hedge Fund Holders: 33
Total Value of Hedge Fund Holdings: $778 Million
Dividend Yield as of May 19: 3.20%

California-based energy infrastructure company Sempra Energy (NYSE:SRE) ranks 4th in our list of top 10 electric utility dividend stocks to buy. The company was founded in 1998 and had over 36 million total customers worldwide. In 2020, the company announced its plans to acquire the remaining stakes that they don’t already own in Infraestructura Energética Nova (IEnova) through a stock for stock exchange phase. The deal is set to close by 2021. On May 6, Wells Fargo maintained an Overweight rating on Sempra Energy and raised the price target to $148.

Sempra Energy has a market cap of $41.5 billion and currently offers a dividend yield of 3.20%. The company’s first-quarter 2021 earnings came in at $874 million. Shares of SRE increased 8% over the past twelve months.

There were 33 hedge funds that reported owning stakes in Sempra Energy at the end of the fourth quarter, up from 32 funds a quarter earlier. The total value of these stakes at the end of Q4 is $778 million.

3. Duke Energy Corporation (NYSE: DUK)

Number of Hedge Fund Holders: 38
Total Value of Hedge Fund Holdings: $614 Million
Dividend Yield as of May 19: 3.77%

Ranking 3rd in our list of top 10 electric utility dividend stocks is American electric power and natural gas holding company Duke Energy Corporation. The energy company has over 7.2 million customers and 58,000 megawatts (MW) of base-load and peak generation in the United States. Earlier this year, Duke subsidiary Duke Energy Renewables announced its plans of acquiring the 144-megawatt (MW) Pflugerville Solar project in Texas from Canadian Solar Inc. (NASDAQ:CSIQ) subsidiary Recurrent Energy. The project is set to operate in mid-2021.

Duke Energy Corporation has a market cap of $78.8 billion. In 2020, Citigroup, Inc.’s net income came in at $6.15 billion. Shares of DUK rose 23% over the past twelve months. On May 18, Morgan Stanley maintained Equal-Weight on Duke Energy and lowered the price target to $107.

There were 38 hedge funds that reported owning stakes in Duke Energy Corporation at the end of the fourth quarter, up from 36 funds a quarter earlier. The total value of these stakes at the end of Q4 is $614 million.

2. Dominion Energy, Inc. (NYSE: D)

Number of Hedge Fund Holders: 47
Total Value of Hedge Fund Holdings: $1.50 Billion
Dividend Yield as of May 19: 3.24%

Ranking 2nd in our list of top 10 electric utility dividend stocks to buy is Dominion Energy, Inc. (NYSE:D). The Virginia-based power and energy company Dominion Energy, Inc. was founded in 1893 and has grown its customer base to over 7 million customers in 16 states. Dominion Energy, Inc. has a market cap of $62.2 billion. Dominion Energy, Inc.’s operating earnings in the first quarter of 2021 came in at $893 million. Shares of D jumped 8% over the past three months. On April 21, Credit Suisse maintained an Outperform rating on Dominion Energy and raised the price target to $90.

There were 47 hedge funds that reported owning stakes in Dominion Energy, Inc. at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $1.50 billion.

1. FirstEnergy Corp. (NYSE: FE)

Number of Hedge Fund Holders: 50
Total Value of Hedge Fund Holdings: $1.30 Billion
Dividend Yield as of May 19: 4.14%

Topping the top 10 electric utility dividend stocks to buy is FirstEnergy Corp. (NYSE:FE). The Ohio-based electric utility company has over 6 million customers within a 65,000-square-mile area of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. On May 18, Morgan Stanley maintained an Overweight rating on FirstEnergy, and raised the price target to $45. FirstEnergy Corp. has a market cap of $20.4 billion and currently offers a dividend yield of 4.14%. FirstEnergy Corp.’s GAAP earnings came in at $335 million in the first quarter of 2021. Shares of FE surged 17% over the last three months.

There were 50 hedge funds that reported owning stakes in FirstEnergy Corp. at the end of the fourth quarter, down from 59 funds a quarter earlier. The total value of these stakes at the end of Q4 is $1.30 billion.

Heartland Mid Cap Value Fund mentioned FirstEnergy Corp. in its Q3 2020 investor letter. Here is what the fund stated:

“The portfolio’s Utility names lagged on a relative basis with the shortfall stemming from a stock-specific issue in the group. FirstEnergy (FE) is a business we’ve owned in the past and sold out of after shares had appreciated following its successful transition to a pure regulated utility through the divestiture of its merchant power unit.

We initiated a new stake in FirstEnergy in March after shares sold off due to concerns that the recession would have an outsized impact on the company’s industrial-oriented client base. Similar to our successful experience in the past, we felt that the company was attractive given its meaningful discount to its peers.

Subsequent to our investment, FirstEnergy was named in an investigation related to $60 million of payments made by the merchant power entity to Ohio politicians. Our initial reaction when news broke was to reduce our exposure to the company, however, we continued our due diligence on the matter and believe that market reaction overestimated the likely fallout from the investigation.

As shares fell in price, we added to our position in the belief that as the matter proceeds, some of the clouds casting a shadow on the business will subside.”

You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.

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