Utility Stock List: Earn Steady, Reliable Income Income Investors 2017-05-23 01:45:09 utility stocks listlist of all utility stockswater utility stocks listelectric utility stocks listutility stocks 2017high-yield utility stockshigh-dividend utility stocksutility stocks that pay dividendsutility stocks with good dividendsbest utility stock This article will focus on a complete list of utility stocks that trade on the U.S. markets, including their features and past performances. Dividend Stocks,IncomeInvestors,News https://www.incomeinvestors.com/wp-content/uploads/2016/12/Bank-of-America-Corp-The-Next-Big-Driver-for-BAC-Stock-150x150.jpg

Utility Stock List: Earn Steady, Reliable Income

Utility Stocks Should Not Be Ignored

Income investors are always looking for investment ideas that will preserve their money and generate a steady income. One group of stocks that should not be ignored by income investors is utility stocks, since they provide a reliable income and are a conservative investment.

Utility stocks have a long track record of generating steady revenue and earnings, which helps preserve capital. Due to this, there are many utility stocks that pay dividends, which are often reviewed regularly for a higher dividend payout per share, adding to investors’ total returns. The utility sector is also where high-yielding investments are often found.

Services from high-yield utility stocks with good dividends are used every day by consumers and include essentials such as water, electricity, heating, and cooling. Since the services are required at all times, the revenue of these companies tends to see no negative effects in a weakening economy. For long-term income investors, this would be the type of company worth considering.

This article will go through the list of all utility stocks worth noting. There are four major segments within the utility sector, so I made it a bit easier by splitting the list of utility stocks up based on these segments. I will also look at how utility stocks have performed in the past compared to a benchmark index and the features of investing in utility stocks.

Features of Utility Stocks 

There are four different sub-segments within the utility sector: water utility companies, electric companies, gas distributors, and alternative power generation. But no matter what segment the company is in, it tends to offer investors the same benefits.

1. Steady Revenue and Income

High-dividend utility stocks have steady margins, revenue, and a high payout. That’s because operating in the utility sector requires a large amount of initial capital for the likes of infrastructure and the network. However, such businesses don’t have many ongoing fees beyond those startup costs. As a result, utility stocks generate a lot of cash flow and are able to afford a dividend.

2. Large Market Share

Companies in the utility sector operate either as a monopoly or an oligopoly. A monopoly is a company that has 100% market share, while an oligopoly shares the market with only a few other companies, giving it a large market share. Companies in these environments enjoy steady, predictable revenue, hence the dividend.

3. Inflation-Protected Earnings

Inflation is a concern for everyone, from investors to management. The great thing about utility stocks, however, is that inflation is not a big issue. You see, as a business sees inflation due to costs, those costs get passed to the end user of its products and services. This keeps the margins of the business steady and the dividend up.

4. Outperforms the Market in a Recession

In a recession, many investors will go over their investments and either invest in safe assets or move to cash. Since a company’s earnings are expected to be lower in a recession, it will reflect in a lower stock price as a result. One of the asset classes that is considered in these instances is utilities stocks because earnings see no impact during a recession. This is notable for both retail investors and large institutional investors, since they are faced with mandates on the capital to ensure it’s preserved. Also, with institutional investors, a certain percentage of capital must be invested, so they can’t move 100% of the cash within their accounts.

How Has the S&P 500 Utility Index Performed? 

Below is a chart comparing the S&P 500 Utilities Index, the S&P 500 Index, and the 10-year U.S. Treasury note yield. The S&P 500 Index is used because it is considered the broadest index based on the sectors represented within, which include the largest in the U.S. based on their market cap.

These companies’ products and services are known worldwide, which helps with global revenue generation. As a result, investors also focus on these companies to invest on a long-term basis and on a short-term one as a trade.

The 10-year Treasury note yield is used due to the nature of utility stocks that pay out a dividend. The yields on the two investments are often looked and assessed with risk factored in. The 10-year Treasury note is considered a risk-free asset because it is issued by the U.S. government, which is guaranteed to still be around in the future.

When the yield on the 10-year Treasury note is higher than a utility stock, than the Treasury note is worth considering, since a higher yield would be owned with less risk. A utility stock would be owned when the yield is higher than the 10-year Treasury note; for taking the additional risk, the reward is the higher yield.

utilityindex

The chart above covers a 10-year period. From the starting point, the S&P 500 Utilities Index outperformed the S&P 500 Index. The return is based on both the capital appreciation of the stock price and the dividend income earned. The dividend from utility stocks tends to increase over time because of the constant and predictable income. Even though the utility index may be considered a boring investment since there is no new technology or nobody is talking about it, the returns speak for themselves. The 10-year Treasury note yield over this period is moving on a downtrend, which is the opposite of what would happen with a dividend growth stock.

What Are Water Utility Stocks? 

These are stocks for companies that provide water-related services to customers, such as supplying water to households and commercial residents. These services are possible thanks to water pipelines built around or in certain areas of the country. Other services include sewage management and disposal and water purification.

These types of businesses have not seen much change over the last century, making those on this water utility stocks list worth considering.

Water Utility Stocks List

Company Name Stock Symbol
American States Water Co AWR
American Water Works Company Inc AWK
Aqua America Inc WTR
AquaVenture Holdings Ltd WAAS
Artesian Resources Corporation ARTNA
Cadiz Inc CDZI
California Water Service Group CWT
Companhia De Saneamento Basico Do Estado De Sao Paulo SBS
Connecticut Water Service Inc CTWS
Consolidated Water Co. Ltd. CWCO
Global Water Resources Inc GWRS
Middlesex Water Company MSEX
Pure Cycle Corporation PCYO
SJW Group SJW
York Water Co YORW

What Are Electric Utility Stocks? 

Stocks under this category are companies that provide electricity for everyday use. These businesses own the likes of generation plants and/or transmission utility assets in either focused areas or spread across the country. Below is the list of electric utility stocks for 2017.

Electric Utility Stock List

Company Name Stock Symbol
Algonquin Power & Utilities Corp AQN
ALLETE Inc ALE
Alliant Energy Corporation LNT
Ameren Corp AEE
American DG Energy Inc ADGE
American Electric Power Company Inc AEP
Atlantic Power Corp AT
Avangrid Inc AGR
Avista Corp AVA
Black Hills Corp BKH
Brookfield Infrastructure Partners L.P. BIP
Brookfield Renewable Partners LP BEP
CenterPoint Energy, Inc. CNP
Centrais Eletricas Brasileiras SA EBR
Centrais Eletricas Brasileiras SA EBR.B
CMS Energy Corporation CMS
Consolidated Edison, Inc. ED
CPFL Energia S.A. (ADR) CPL
Dominion Energy Inc D
DTE Energy Co DTE
Duke Energy Corp DUK
Edison International EIX
El Paso Electric Company EE
Empresa Distribuidora y Comercializadora Norte SA DN
Enel Americas SA ENIA
Enel Chile SA ENIC
Enel Generacion Chile SA EOCC
Energy Company of Minas Gerais CIG.C
Energy Company of Parana ELP
Entergy Corp ETR
Eversource Energy ES
Exelon Corp EXC
FirstEnergy Corp FE
Fortis Inc FTS
Genie Energy Ltd GNE
Great Plains Energy Inc GXP
Hawaiian Electric Industries Inc HE
Huaneng Power International Inc HNP
Idacorp Inc IDA
Innovative Industrial Properties Inc IIPR
Just Energy Group Inc JE
Kenon Holdings Ltd KEN
Korea Electric Power Corp KEP
MGE Energy Inc MGEE
National Grid PLC NGG
NextEra Energy Inc NEE
NorthWestern Corp NWE
NRG Energy Inc NRG
NRG Yield Inc NYLD
NRG Yield Inc NYLD.A
OGE Energy Corp OGE
Pampa Energia SA PAM
PG&E Corporation PCG
Pinnacle West Capital Corp PNW
PNM Resources Inc PNM
Portland General Electric Co POR
PPL Corp PPL
Public Service Enterprise Group Inc PEG
SCANA Corp SCG
Southern Co SO
Spark Energy Inc SPKE
Stone Harbor Emerging Markets Income Fund EDF
The AES Corp AES
TransAlta Corp TAC
Unitil Corp UTL
Valeritas Holdings Inc VLRX
Vistra Energy Corp VST
Vivopower International PLC VVPR
WEC Energy Group Inc WEC
Westar Energy Inc WR
Xcel Energy Inc XEL

What Are Gas Distributor’s Utility Stocks? 

There are many different segments for gas distributors, but at the end of the day, they all provide natural gas to homes and commercial buildings. Natural gas is used for heating, appliances, fuel for vehicles, and air conditioners.

Some companies will have operations that go from the start of the business process all the way to the end, while others only cover a single part. Examples of the different segments in gas distributors are natural gas storage, gas product marketing, and transportation services.  Below is a list of gas distributors stocks that trade on the exchanges.

Gas Distributor’s Utility Stock List 

Company Name Stock Symbol
Atmos Energy Corporation ATO
Chesapeake Utilities Corp CPK
Clean Energy Fuels Corp CLNE
Delta Natural Gas Company, Inc. DGAS
Dynegy Inc. DYN
Ferrellgas Partners, L.P. FGP
Gas Natural Inc EGAS
MDU Resources Group Inc MDU
New Jersey Resources Corp NJR
NiSource Inc. NI
Northwest Natural Gas Co NWN
ONE Gas Inc OGS
RGC Resources Inc RGCO
Sempra Energy SRE
South Jersey Industries Inc SJI
Southwest Gas Holdings Inc SWX
Spire Inc SR
Star Gas Partners LP SGU
Suburban Propane Partners LP SPH
UGI Corp UGI
Vectren Corp VVC
WGL Holdings Inc WGL

What Are Alternative Power Utility Stocks?

Alternative power generation stocks are ones that offer solar power systems, hydroelectric power (hydropower) systems, and wind systems. Solar power comes from solar panels that are placed on resident homes or commercial buildings and are also found in farmland areas. Hydropower uses water to create electricity for homes and businesses. Lastly, wind power uses wind turbines to create electricity.

These methods of generating electricity differ from the other methods because they are environmentally friendly, leaving behind no pollution. Below is the list of alternative power generation utility stocks.

Alternative Power Generation Utility Stock List 

Company Name Stock Symbol
8point3 Energy Partners LP CAFD
Atlantica Yield PLC ABY
Azure Power Global Ltd AZRE
Calpine Corporation CPN
Charles Schwab Corp SCHW.PR.C
Covanta Holding Corp CVA
Hydrogenics Corporation HYGS
Medigus Ltd. MDGS
NextEra Energy Partners LP NEP
Ormat Technologies, Inc. ORA
Pattern Energy Group Inc PEGI
Sky Solar Holdings Ltd (ADR) SKYS
TerraForm Global Inc GLBL
TerraForm Power Inc TERP
US Geothermal Inc HTM

Investing in Utility Stocks

One way of investing in utility companies is simply by buying shares in companies from the lists above. Of the four different categories, you could focus on only one or choose a few each list. I would recommend doing some research to ensure that you choose the best utility stocks that meet all your investment needs.

Since the utility sector is divided into different sub-sectors, it could be time-consuming to purchase stocks in each category. Also, purchasing a lot of individual stocks will add to the commission fee that will be paid to the broker. To avoid this and keep more money in your pocket, consider an exchange-traded fund (ETF). This would provide exposure to the entire group without having to pick and choose each stock. And ETF will also provide diversification.

One ETF worth considering as an investment opportunity is Utilities SPDR (ETF) (NYSEARCA:XLU). The holdings within XLU are from the S&P 500 Utilities Select Sector Index. Some of the names that are held are also included in the lists above, such as NextEra Energy Inc (NYSE:NEE), American Water Works Company Inc (NYSE:AWK), and Southern Co (NYSE:SO).

The dividend from XLU is paid out on a quarterly basis and has seen a consistent boost over its history. This is because the holdings see an increase in their dividend, which is then passed along to unitholders.

This is a good option for an investment because it is so cheap and liquid. Its management expense ratio (MER), which is paid to the people who look after the capital and investment decisions for XLU, is 0.14%. This means that for every $10,000 invested in XLU, $14.00 will be paid annually. As for the liquidity, the shares are easy to both buy and sell.

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