In this article, we will take a look at the top 10 electric utility dividend stocks to buy. For a detailed analysis of these companies, go directly to the Top 10 Electric Utility Dividend Stocks to Buy.
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 (NYSE:SO) 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 (NYSE:SO) 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 (NYSE:SRE) 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 (NYSE:SRE) 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 (NYSE:DUK). 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 (NYSE:DUK) 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 (NYSE:DUK) 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. (NYSE:D) 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. (NYSE:D) 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. (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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