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Best Utility Stocks To Invest In for 2020

Utility stocks can be a good investment because of the dividends paid out coupled with their stability. We’ve made a list of the best utility stocks to invest in for 2020 based on P/E ratio, dividend yield and current sentiment among analysts. You should also take a look at the stock’s current share price and compare it to it’s historical prices.

These utility stocks include regulated and unregulated electricity, water and gas. The current average yield across the industry is 3.96%.

With so many to choose from, it can be difficult to decide which ones to invest in. While customers may not have a choice when it comes to regulated utilities, market sentiment based on the company’s overall financial health, plus predictions on growth, can have an impact on what makes the best investment for a given quarter or even year.

Based on current stats and analysts’ opinions, I’ve compiled a list of what I believe are the best utility stocks to invest in for 2020. They are (in no particular order):

NEE (NextEraEnergy)

NextEra Energy Logo

52-Week Range: 164.78 – 239.89

Dividend Yield: 2.13

P/E: 35.19

Analysts’ Current Opinions: Buy

NEE is a Fortune 200 company and the largest U.S.-listed utility stock by market cap. Through its subsidiary, NextEra Energy Resources, it is the world’s largest generator of renewable energy from wind and sun. It serves rate-regulated electricity to approximately 10 million people through approximately 5 million customer accounts in the east and lower west coasts of Florida.

Why I like NEE: With a P/E at 35.19, NextEraEnergy is poised for growth. Also, the price per share has increased steadily since 2010.

PPL Corp (PPL)

PPL Corp Logo

52-Week Range: 27.31-34.66

Dividend Yield: 4.81%

P/E: 13.97

Analysts’ Current Opinions: Neutral

PPL Corp (PPL) owns seven regulated utility companies in the U.S. It operates its electric utility operations through three segments: Kentucky Regulated, Pennsylvania Regulated, and U.K. Regulated. It delivers electricity to 10.5 million customers in Pennsylvania, Kentucky, and Great Britain and also provides natural gas delivery service to 321,000 customers in Kentucky.

Why I like PPL: The analysts are currently neutral but with a dividend yield of 4.81%, I think PPL is worth an investment if you can snag it for less than $32 a share.

Duke Energy (DUK)

Duke Energy Logo

52-Week Range: 82.46-97.37

Dividend Yield: 4.36%

P/E: 18.7

Analysts’ Current Opinions: Neutral

Duke Energy (DUK) is a regulated electric company that generates, transmits, distributes, and sells electricity in North and South Carolina, Florida, and the Midwest. It currently serves 7.4 million customers. It owns 50,880 megawatts of generation capacity and operates 9 subsidiaries.

Why I like DUK: Duke Energy only has a moderate P/E for the industry but the dividend yield is strong. There can also be swing trade opportunities with a spread of about $15 a share within the past year.

Fortis Inc (FTS)

Fortis Inc logo

52-Week Range: 31.80-42.80

Dividend Yield: 3.61%

P/E: 23.25

Analysts’ Current Opinions: Strong Buy

FTS is Canada’s private largest utility company. It operates as an electric and gas utility company in Canada, the United States, and the Caribbean. Fortis Inc generates, transmits, and distributes electricity to populations in five Canadian provinces, nine U.S. states and three Caribbean countries. It has an average annual dividend growth target of 6% through 2024.

Why I like FTS: It has diversity in the populations it serves and therefore, creates some diversity for the investor. It also has a reputable P/E ratio and is predicted to increase its dividend for years to come.

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American Electric Power (AEP)

American Electric Power logo

52-Week Range: 72.26-96.22

Dividend Yield: 3.07%

P/E: 21.44

Analysts’ Current Opinions: Neutral

AEP is a regulated electric company based in Ohio, serving 5.4 million customers in 11 states. It generates, transmits and distributes electricity to retail and wholesale customers in the U.S. It also supplies and markets wholesale electricity to other utility companies. AEP has increased its dividend by 6.3% over the past two years.

Why I like AEP: American Electric Power has a solid P/E ratio and dividend yield. Also, being in both the wholesale and retail market, and serving 11 states, helps keep AEP somewhat diversified.

Southern Co (SO)

Southern Company logo

52-Week Range: 42.50-63.29

Dividend Yield: 3.99%

P/E: 14.25

Analysts’ Current Opinions: Buy

SO is currently the second-largest utility company in the U.S. in terms of customer base. Through its 19 subsidiaries, it serves approximately 9 million gas and electric utility customers in 6 states. It operates in four segments: Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services. SO currently has roughly 117 billion in assets.

Why I like SO: Southern Company serves a high number of customers and is diversified by operating in four segments. Also, Analysts currently recommend a buy. It also has a solid dividend yield.

Consolidated Edison Inc (ED)

Consolidated Edison logo

52-Week Range: 73.30-87.19

Dividend Yield: 3.41%

P/E: 20.47

Analysts’ Current Opinions: Neutral

ED is one of the largest investor-owned energy companies in the U.S. It offers electric services to 3.8 million customers in New York and New Jersey. Consolidated Edison Inc also provides gas to 1.1 million customers in New York and steam to approximately 1,622 customers in parts of Manhattan. It currently has an annual revenue of over 12 billion.

Why I like ED: Despite the neutral recommendation from analysts, ED could be a good buy depending on current share price due to its healthy P/E ratio and dividend yield. And like DUK, there can good points of entry on share price that present swing trade opportunities.

Eversource Energy (ES)

Eversource Energy logo

52-Week Range: 62.61-86.55

Dividend Yield: 2.61%

P/E: 29.21

Analysts’ Current Opinions: Neutral

ES is a Fortune 500 energy company and is New England’s largest energy provider. It currently serves more than 3.6 million electric and natural gas customers in Connecticut, Massachusetts, and New Hampshire. The company operates in four segments: Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution.

Why I like ES: ES is a solid company that has worked to diversify its utility services. It also serves customers who are more likely to consume a lot of energy in the winter months. Like ED, Eversource Energy could be a good buy depending on current share price. It has a higher P/E than many of its peers although the dividend yield is only modest.

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