24/7 Wall St. Insights
- The utility sector is up a whopping 20% in 2024.
- High-yield dividend stocks will be in favor as interest rates drop.
- Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “7 Things I Demand in a Dividend Stock,” plus get our two best dividend stocks to own today. Access 2 legendary, high-yield dividend stocks Wall Street loves.
Dividend stocks are a favorite among investors for good reason. They provide a steady income stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.
In simpler terms, it is the sum of income and stock appreciation. Dividend stocks can boost investment success by delivering regular income and capital appreciation.
Utility stocks have shined in 2024, as mentioned, up a stunning 20%. With interest rates set to fall for the rest of 2024 and likely another 100-basis-point cut in 2025, growth and income investors will continue to load up on the sector. Jefferies’ outstanding utility analyst Julien Dumoulin-Smith is very bullish on the sector, and he believes the differences between the “haves” and the “have nots” will be very obvious. Plus, he noted that sector winners will likely share these positive data points:
- Involvement in data center growth
- Residential and commercial rate affordability
- Supportive regulatory environments
Seven stocks were started with a Buy rating, and we screened the list looking for the companies paying the highest dividends. Five stocks look like great ideas for investors looking for growth and dependable dividends.
Why are we covering utility stocks?
The S&P 500 utilities sector has gained well over 20% from its low in mid-February and has outperformed the large-cap benchmark index by 3%. Equities will be hit if the major stock market indices significantly decline. However, history shows that stodgy utility stocks will likely hold their ground much better than high-flying technology stocks, especially those chasing artificial intelligence mania.
With a product always in demand and winter right around the corner, high-yielding utilities may be the best idea now for worried investors.
Evergy
Less known than some utility stocks, Evergy Inc. (NASDAQ: EVRG) offers a rich 4.13% dividend. Together with its subsidiaries, Evergy generates, transmits, distributes, and sells electricity in the United States.
The company generates electricity through:
- Coal,
- Landfill gas
- Uranium
- Natural gas and oil sources
- Solar, wind, and other renewable sources
The company serves residences, commercial firms, industrials, municipalities, and other electric utilities.
OGE Energy
With a 4.11% dividend and close to breaking out, this is a solid idea for investors now. OGE Energy Corp. (NYSE: OGE) and its subsidiaries operate as an energy services provider in the United States. The company generates, transmits, distributes, and sells electric energy.
In addition, it provides retail electric service to approximately 896,000 customers, covering a service area of roughly 30,000 square miles in Oklahoma and western Arkansas.
It also owns and operates coal-fired, natural gas-fired, wind-powered, and solar-powered generating assets.
Pinnacle West Capital
Trading just shy of a 52-week high, this company pays shareholders a 3.90% dividend. Through its subsidiary, Pinnacle West Capital Corp. (NYSE: PNW) provides retail and wholesale electric services primarily in Arizona.
The company generates, transmits, and distributes electricity using:
- Coal
- Nuclear
- Gas
- Oil
- Solar generating facilities
Its transmission facilities include overhead and underground lines, and distribution facilities consist of overhead and underground primary cables. The company also owns and maintains transmission and distribution substations and energy storage facilities.
Exelon
This top utility stock makes good sense now for conservative accounts and pays a dependable 3.77% dividend. Exelon Corp. (NYSE: EXC) is a utility services holding company engaged in the energy distribution and transmission businesses in the United States and Canada.
The company purchases and regulates retail sales of electricity and natural gas and the transmission and distribution of electricity and natural gas to retail customers.
It also offers support services, including:
- Legal
- Human resources
- Information technology
- Supply management
- Financial
- Engineering
- Customer operations
- Distribution and transmission planning
- Asset management
- System operations
- Power procurement services
The company serves:
- Distribution utilities
- Municipalities
- Cooperatives
- Financial institutions
- Commercial, industrial, governmental, and residential customers
PPL
This utility stock is a top Jefferies pick. It is perfect now for conservative accounts and pays a dependable 3.17% dividend. PPL Corp. (NYSE: PPL) is an energy company that provides electricity and natural gas to approximately 3.6 million customers in the United States.
It operates through three segments:
- Kentucky Regulated
- Pennsylvania Regulated
- Rhode Island Regulated
The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island. It delivers natural gas to customers in Kentucky and Rhode Island and generates electricity from power plants in Kentucky.
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