Are These Utilities Stocks Still A Safe Pick For Dividend Investors?

The utilities sector continues to encounter numerous fundamental challenges. Electricity demand continues to be stagnant in most parts of the America, particularly residential demand, which has remained flat since 2006. This stagnant demand is hurting companies when they also have to spend more capital to advance their systems. These heavy expenditures, when spread over low growth consumption, will lead to input cost increases, resulting in depressed margins and financial difficulties.

Taking this turbulent environment into consideration, in this article, I pick three companies, out of which NextEra Energy (NEE) and PPL Corporation (PPL) are rising to meet challenges and generating steady growth. The third company, Exelon, is having some difficulties and does not look like a good stock to buy. Digging into these companies, I keep my focus on their dividend stability by analyzing how their business plan, financial situation and future prospects are likely to sustain dividends.

Source: Seeking Alpha

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