2022 List Of All 64 Utilities Sector Stocks Now From Major Utility Sector ETFs

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2022 List Of All 64 Utilities Sector Stocks Now From Major Utility Sector ETFs


Updated on September 22nd, 2022 by Nate Parsh

Spreadsheet data updated daily

Utility stocks can make excellent investments for long-term dividend growth investors.

Durable, regulatory-based competitive advantages allow these companies to consistently raise their rates over time. In turn, this allows them to raise their dividend payments year in and year out.

Even better, many utility stocks have above-average dividend yields, providing a compelling combination of income now and growth later for long-term investors.

Because of these favorable industry characteristics, we’ve compiled a list of utility stocks. The list is derived from the major utility sector exchange-traded funds JXI, VPU and XLU.

You can download the list of all utility stocks (along with important financial ratios such as dividend yields and payout ratios) by clicking on the link below:

 

Keep reading this article to learn more about the benefits of investing in utility stocks.

Table Of Contents

The following table of contents provides for easy navigation:

How To Use The Utility Dividend Stocks List To Find Investment Ideas

Having an Excel database of all the dividend-paying utility stocks combined with important investing metrics and ratios is very useful.

This tool becomes even more powerful when combined with knowledge of how to use Microsoft Excel to find the best investment opportunities.

With that in mind, this section will provide a quick explanation of how you can instantly search for utility stocks with particular characteristics, using two screens as an example.

The first screen that we will implement is for utility stocks with price-to-earnings ratios below 15.

Screen 1: Low P/E Ratios

Step 1: Download the Utility Dividend Stocks Excel Spreadsheet List at the link above.

Step 2: Click the filter icon at the top of the price-to-earnings ratio column, as shown below.

Utility Dividend Stocks Landing Page Excel 1

Step 3: Change the filter field to “Less Than” and input “15” into the field beside it.

Utility Dividend Stocks Landing Page Excel 2

The remaining list of stocks contains dividend-paying utility stocks with price-to-earnings ratios less than 15. As you can see, there are relatively few securities (at the time of this writing) that meet this strict valuation cutoff.

The next section demonstrates how to screen for large-cap stocks with high dividend yields.

Screen 2: Large-Cap Stocks With High Dividend Yields

Businesses are often categorized based on their market capitalization. Market capitalization is calculated as stock price multiplied by the number of shares outstanding and gives a marked-to-market perception of what people think a business is worth on average.

Large-cap stocks are loosely defined as businesses with a market capitalization above $10 billion and are perceived as lower risk than their smaller counterparts. Accordingly, screening for large-cap stocks with high dividend yields could provide interesting investment opportunities for conservative, income-oriented investors.

Here’s how to use the Utility Dividend Stocks Excel Spreadsheet List to find such investment opportunities.

Step 1: Download the Utility Dividend Stocks Excel Spreadsheet List at the link above.

Step 2: Click the filter icon at the top of the Market Cap column, as shown below.

Utility Dividend Stocks Landing Page Excel 3

Step 3: Change the filter setting to “Greater Than”, and input 10000 into the field beside it. Note that since market capitalization is measured in millions of dollars in this Excel sheet, filtering for stocks with market capitalizations greater than “$10,000 millions” is equivalent for screening for those with market capitalizations exceeding $10 billion.

Utility Dividend Stocks Landing Page Excel 4

Step 4: Close that filter window (by exiting it, not by clicking ‘clear filter’) and click on the filter icon for the “dividend yield” column, as shown below.

Utility Dividend Stocks Landing Page Excel 5

Step 5: Change the filter setting to “Greater Than” and input 0.03 into the column beside it. Note that 0.03 is equivalent to 3%.

Utility Dividend Stocks Landing Page Excel 6

The remaining stocks in this list are those with market capitalizations above $10 billion and dividend yields above 3%. This narrowed investment universe is suitable for investors looking for low-risk, high-yield securities.

You now have a solid fundamental understanding of how to use the Utility Dividend Stocks Excel Spreadsheet List to its fullest potential. The remainder of this article will discuss the characteristics that make the utility sector attractive for dividend growth investors.

Why Utility Dividend Stocks Make Attractive Investments

The word “utility” describes a wide variety of business models but is usually used as a reference to electric utilities – companies that engage in the generation, transmission, and distribution of electricity.

Other types of utilities include propane utilities and water utilities.

So why do these businesses make for attractive investments?

Utilities usually conduct business in highly regulated markets, complying with rules set by federal, state, and municipal governments.

While this sounds highly unattractive on the surface, what it means in practice is that utilities are basically legal monopolies.

The strict regulatory environment that utility businesses operate in creates a strong and durable competitive advantage for existing industry participants.

For this reason, electric utilities are among the most popular stocks for long-term dividend growth investors — especially because they tend to offer above-average dividend yields.

Indeed, the regulatory-based competitive advantages available to utility stocks give them the consistency to raise their dividends regularly.

Simply put, utility stocks are some of the most dependable dividend stocks around.

To provide a few examples, the following utility stocks have exceptionally long streaks of consecutive dividend increases:

The long streak of consecutive dividend increases is possible only because of their unique industry-specific competitive advantages.

Clearly, the utility sector is very stable. People are going to need electricity and water in ever-increasing amounts for the foreseeable future.

One characteristic that does not describe utility stocks is high growth. One of the regulatory constraints imposed upon utility companies is the pace at which they can increase the fees paid by their customers.

These rate increases are usually in the low-single-digits, which provides a cap on the revenue growth experienced by these companies.

Utility stocks typically don’t offer strong total returns, but there are exceptions.

The Top 10 Utility Stocks Now

Taking all of the above into consideration, the following section discusses our top 10 list of North American utility stocks today, based on their expected annual returns over the next five years.

The rankings in this article are derived from our expected total return estimates from the Sure Analysis Research Database.

The top 10 list was additionally screened to include only Dividend Risk scores of A or B, to focus on quality companies with safe dividends.

The 10 utility stocks with the highest projected five-year total returns are ranked in this article, from lowest to highest.

Related: Watch the video below to learn how to calculate expected total return for any stock.

 

Rankings are compiled based upon the combination of current dividend yield, expected change in valuation, as well as expected annual earnings-per-share growth.

This determines which utility stocks offer the best total return potential for shareholders.

Top Utility Stock #10: Evergy Inc. (EVRG)

Evergy is an electric utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri. Through its subsidiaries Evergy Kansas, Evergy Metro and Evergy Missouri West, the company serves approximately 1.4 million residential customers, nearly 200,000 commercial customers and 6,900 industrial customers and municipalities in Kansas and Missouri. Evergy has a market capitalization of $15 billion and is significantly impacted by seasonality, as about one-third of its retail revenue is recorded in the third quarter.

Evergy has grown its earnings-per-share at a 5.7% average annual rate over the last decade. This mid-single digit growth rate is typical in the utility sector. However, Evergy has enhanced its investments in growth projects lately and hence it is likely to accelerate its growth pattern in the upcoming years. The company expects to spend $10.7 billion on capital expenses in 2022-2026 while it will also reduce its operational and maintenance expenses.

Some of this investment will be focused on renewable energy sources.

Source: Investor Presentation

The subsidiaries of Evergy operate on a fully regulated retail utility model in Missouri and Kansas and thus they do not face any competition in these markets. This typical utility model, which generates reliable and growing earnings, is undoubtedly a strong competitive advantage

We expect annual returns of 10.1% per year, due to 7.0% EPS growth and the 3.5% dividend yield, with valuation not currently expected to play a major role in total returns.

Click here to download our most recent Sure Analysis report on Evergy (preview of page 1 of 3 shown below):


Top Utility Stock #9: TransAlta Renewables Inc. (TRSWF)

TransAlta Renewables trades on the Toronto Stock Exchange (under the ticker RNW) and on the over-the-counter market (under the ticker TRSWF). Its history in renewable power generation goes back more than 100 years. In 2013, the company was spun off from TransAlta (TAC, TSX:TA), which remains a major shareholder in the alternative power generation company. Unless otherwise noted, US$ is used.

TransAlta Renewables’ history shows that its earnings-per-share are highly unpredictable due to real asset depreciation. However, it appears to generate stable cash flow that supports its dividend. So, we use the free cash flow per share metric in the table above

The company’s dividend appears well supported by the business model as TransAlta’s portfolio is reinforced by long contracts as evidenced by its 11-year weighted average contract life.

We expect 10.4% annual returns, due to 3% free cash flow per share growth, the 6.0% dividend yield, and a 2.8% contribution from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on TransAlta Renewables (preview of page 1 of 3 shown below):


Top 10 Utility Stock #8: Fortis Inc. (FTS)

Fortis is Canada’s largest investor-owned utility business with operations in Canada, the United States, and the Caribbean. It is cross-listed in Toronto and New York. Fortis trades with a current yield of 4.0%.

At the end of 2021, Fortis had C$58-billion of assets. 63% were in the U.S., 34% in Canada, and 3% in the Caribbean; 82% of assets were regulated electric utility assets, 17% were regulated gas, and only 1% were non-regulated.

Source: Investor Presentation

Fortis reported stable Q2 2022 results on 07/28/22. For the quarter, it reported adjusted net earnings of C$284 million, up 12% versus Q2 2021, while adjusted earnings-per-share (EPS) rose 3.6% to C$0.57.

The utility invested C$1.9 billion for its capital spending year to date, which is on track for this year’s capital spending plan of $4.0 billion. Management also noted it’s on track to achieve its mid-term 2035 target to reduce GHG emissions by 75% with an ultimate net-zero target by 2050.

We expect annual returns of 10.5% per year, due to 6% expected EPS growth, the 4.0% dividend yield and a ~1.1% boost from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on Fortis (preview of page 1 of 3 shown below):

Top Utility Stock #7: Red Electrica Corporacion S.A. (RDEIY)

Red Electrica is the parent company for a group of subsidiary companies, which are involved in joint operation with each other and other operators. The parent company’s registered office is located in Madrid, Spain. The nearly $10 billion market capitalization company is listed on the Spanish automated quotation system as part of the selective IBEX-35 index under the ticker ‘REE.MC’ and it is listed in the U.S. on the over-the-counter market under the ticker RDEIY.

The group’s principal activities are: electricity transmission, and system operation and management of the transmission network for the Spanish electricity system. The company also operates outside of Spain under the subsidiary, Red Eléctrica Internacional, S.A.U. and the company has telecommunication operations to third parties in Spain through Red Eléctrica Infraestructuras de Telecomunicación.

Lastly, the company develops and builds electricity infrastructure and facilities through their subsidiaries, Red Eléctrica Infraestructuras en Canarias, S.A.U. (REINCAN) and Interconexión Eléctrica FranciaEspaña, S.A.S. (INELFE).

Earnings-per-share only declined in two years in the past decade — in 2015 and 2020. During the last financial crisis, the Great Recession in 2008-2009, Red Electrica was still able to grow its earnings despite a declining market by over 15% points that year.

We expect annual returns of 10.9% over the next five years, driven by 5% earnings growth, the 6.3% yield, and a 0.5% contribution from multiple expansion.

Click here to download our most recent Sure Analysis report on Red Electrica (preview of page 1 of 3 shown below):


Top Utility Stock #6: ONE Gas Inc. (OGS)

ONE Gas, Inc. is one of the largest publicly traded natural gas utilities in the United States.

Source: Investor Presentation

The company provides natural gas distribution services to approximately 2.2 million customers. ONE Gas is the largest natural gas distributor in Oklahoma (88% market share) and Kansas (72% market share), and the third-largest in Texas (13% market share). Its customers are residential, commercial, and transportation-related in all three states.

ONE Gas is the successor to the company founded in 1906 as Oklahoma Natural Gas Company, which became ONEOK, Inc. (NYSE: OKE) in 1980. On January 31st, 2014, ONE Gas officially separated from ONEOK, Inc. The company generates around $1.8 billion in annual revenues and is based in Tulsa, Oklahoma.

Being the dominant natural gas provider in Oklahoma and Kansas, the company possesses a significant competitive advantage. Due to the CAPEX-demanding nature of its operations, smaller competitors should pose no threat in these two states. In Texas, competition is harsher, though the company could have greater growth prospects due to the state’s much more dynamic population growth. Overall, ONE Gas is a quality operator, proven by its consistently improving profitability and smooth detachment from ONEOK.

We expect annual returns of 11.0% per year, due to 7% expected EPS growth, the 3.1% dividend yield and a ~1.3% tailwind from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on ONE Gas (preview of page 1 of 3 shown below):


Top Utility Stock #5: Algonquin Power & Utilities Corp. (AQN)

Algonquin Power & Utilities Corp. trades on both the Toronto Stock Exchange and New York Stock Exchange under the ticker, AQN. The renewable power and utility company was founded in 1988.

Source: Investor Presentation

The company has increased its dividend every year since 2011. It has two business segments: regulated utilities (natural gas, electric, and water) and non-regulated renewable energy (wind, solar, hydro, and thermal). Combined, its entire portfolio has 4.3 GW of generating capacity that it aims to achieve 75% renewable energy generation by 2023.

Algonquin serves more than 1 million connections primarily in the U.S. and Canada. It also has renewable and clean energy facilities that are largely (about 82%) under long-term contracts of ~12 years with inflation escalations.

We expect annual returns of 12.9% per year, due to 6.5% expected EPS growth, the 5.6% dividend yield and a ~1.9% boost from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on Algonquin Power & Utilities (preview of page 1 of 3 shown below):


Top Utility Stock #4: Allete, Inc. (ALE)

ALLETE is an electric services company which operates primarily in the upper Midwest and invests in transmission infrastructure and other energy-related businesses. ALLETE owns Minnesota Power electric utility which serves over 145,000 residents in 15 municipalities and certain large industrial customers.  The corporation has nearly 1,400 employees. ALLETE can trace its roots back to 1906, when it was built on the hydropower of Minnesota’s St. Louis River and remains headquartered in Duluth, Minnesota.

ALLETE’s other businesses include BNI Energy, ALLETE Clean Energy, Superior Water, Light and Power and ALLETE Renewable Resources.

Source: Investor Presentation

ALETTE’s earnings have been up and down in the last decade, but they have certainly trended up over the long term. The 9-year average growth rate of 2.5% is nothing impressive, but ALLETE has targeted a minimum average EPS growth of 5% to 7% percent annually going forward, all while maintaining the dividend which it has paid since 1948.

We project that the stock will provide annual returns of 13.1% through 2027 due to a 4% earnings growth rate, 4.6% dividend yield, and a ~5.6% tailwind from an expanding P/E mutliple.

Click here to download our most recent Sure Analysis report on ALLETE (preview of page 1 of 3 shown below):

 

Top Utility Stock #3: Suburban Propane Partners LP (SPH)

Suburban Propane has been in operation since 1928 and became a Master Limited Partnership in 1996. The partnership services most of the U.S. with propane and other energy sources, with propane making up around 90% of total revenue. It has a market capitalization of $1,040 million and should generate about $1.3 billion in revenue this year. The partnership has about 3,200 employees in 41 states, serving approximately 1 million customers.

Cash flow has been predictably volatile during the past decade as it is all down to the weather for Suburban. It relies heavily upon heating demand so when temperatures are warmer than normal – as they have been for the past four years – results suffer. We forecast 1% average annual growth for the next five years as Suburban grapples with weather-related volumes but produces higher margins.

Suburban’s payout ratio is very reasonable against its cash flow per share. Over time, we expect that to rise given that we see the distribution rising.

Projected returns over the next five years are 13.9%, driven by a 1% cash flow per share growth, the 8% dividend yield, and a 6.3% contribution from multiple expansion.

Click here to download our most recent Sure Analysis report on Suburban Propane Partners (preview of page 1 of 3 shown below):

 

Top Utility Stock #2: Via Renewables Inc. (VIA)

On August 10th, 2021, Spark Energy (SPKE) changed its name to Via Renewables (VIA) to reflect its direction to renewable energy. It is an independent retail energy services company founded in 1999. The organization provides residential and commercial customers with alternative choices for their natural gas and electricity. Via Renewables is headquartered in Houston, Texas, and currently operates in 19 states and serves 101 utility territories. Via Renewables has a market cap of $314 million and executed its initial public offering in 2014.

Source: Investor Presentation

Since its IPO, Via Renewables made many acquisitions and has grown its customer base at a fast pace. However, this strategy has hardly borne fruit so far. The company has a remarkably volatile performance record and hence it is essentially impossible to forecast its future results with any degree of accuracy.

As a small-cap energy business, Via Renewables tends to be more volatile than most large cap stocks. To provide a perspective, the stock is -65% off its peak posted about five years ago. Moreover, the stock could underperform the market during sell-off periods. In the sell-off triggered by the pandemic, the stock plunged -50% whereas the S&P 500 fell -35%. Furthermore, Via Renewables is not followed by analysts and provides little information in its reports.

That said, we expect that the stock will provide annual returns of 14.4% over the next five years due to 6% earnings growth, the yield of 9.9%, and a ~1.7% contribution from multiple expansion. We note that the stock might be best suited for those with a higher tolerance for risk.

Click here to download our most recent Sure Analysis report on Via Renewables (preview of page 1 of 3 shown below):


Top Utility Stock #1: UGI Corporation (UGI)

UGI Corporation is a gas and electric utility that operates in Pennsylvania, in addition to a large energy distribution business that serves the entire U.S. and other parts of the world. It was founded in 1882 and has paid consecutive dividends since 1885. It should generate about $8.2 billion in revenue this year. The company operates in four reporting segments: AmeriGas, UGI International, Midstream & Marketing, and UGI Utilities.

UGI reported FQ3 results on 08/03/22. Adjusted earnings-per-diluted share for the quarter came in at $0.06, down from $0.13 per diluted share in the year-ago quarter. GAAP diluted EPS came in at $(0.3), down from $0.72 in the year-ago period while revenue increased by 35.9% year-over-year to $2.03 billion.

Source: Investor Presentation

We see 7.2% annualized growth over the next half decade. UGI completes acquisitions periodically, further bolstering future growth. It does not buy back stock, but these initiatives should be enough to drive earnings-per-share growth over the long-term. Keep in mind that results are non-linear thanks to the weather, so UGI will almost certainly not achieve steady growth, but will go through stops and starts. Long term, however, the growth story remains intact.

Management is dedicated to continuing the 130+ year streak of paying dividends and the 35 years of consecutive increases.

Total returns are expected to reach 15.2% per year, due to 7.2% expected EPS growth, the 4.1% dividend yield, and a -4.9% tailwind from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on UGI (preview of page 1 of 3 shown below):

 

Final Thoughts

The utility sector is a great place to find high-quality dividend stocks suitable for long-term investment.

It is not, however, the only place to find attractive investments.

If you’re willing to venture outside of the utility industry for investment opportunities, the following Sure Dividend databases are very useful:

If you’re looking for other sector-specific dividend stocks, the following Sure Dividend databases will be useful:

Thanks for reading this article. Please send any feedback, corrections, or questions to support@suredividend.com.


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