Top 5 Electric Utility Dividend Stocks to Buy

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. (NYSE:FE) 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. (NYSE:FE) 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. (NYSE:FE) 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.”

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