5 Best Utility Stocks for Dividend Growth

If you’re buying utility stocks for dividends, focus on the firms that are boosting their payouts the fastest. I’ll give you my top 5 in a minute. But first, let me explain why this strategy is a must for utility investors today. The Utilities Select Sector Spider ETF (XLU) pays just 3.4% currently. This puts utility dividends near 7-year low. The problem with buying utility stocks with low yields is that, in most cases, payout boosts aren’t going to provide much help. XLU has only raised its dividend by a total of 24% over the last 7 years. That’s less than 3.5% annually.

Ironically, it’s the deregulated part of these businesses that are getting crushed. Power and natural gas prices are in the tank. Utilities without the protective shelter of government regulation are experiencing the worst of both business worlds. Your grandpa had it right – invest in regulated utilities. We should do the same, and strive for 80% regulation or better. Here are 5 utility stocks candidates that boast strong protected business, with above-average growth prospects, too: Southern Company (SO), Duke Energy (DUK), Duke Energy (DUK), WEC Energy Corp (WEC) and NextEra Energy (NEE).

Source: InvestorPlace

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