Utility Stocks: Invest in Black Hills, NextEra, and Eversource

As November approaches, a report highlights three notable utility stocks: Black Hills, known for its consistent dividend growth; NextEra Energy, offering rapid dividend increases; and Eversource, which appears undervalued. Each company presents unique investment opportunities for diverse investor preferences.

Date: 04-11-2024

AI Rating: 7

Analysis of Utility Stocks

The report outlines the attractiveness of three utility stocks: Black Hills, NextEra Energy, and Eversource Energy, catering to different investor profiles.

1. Black Hills (NYSE: BKH)

Black Hills, with a market cap of about $4.1 billion, benefits from a customer growth rate nearly three times that of the U.S. population. The company has a reliable history of dividend growth, with a commendable 5% annualized increase over the past decade, accumulating 54 consecutive years of dividend growth.

The stock also features a robust 4.4% dividend yield, surpassing the average yield in the utility sector. This steady performance and attractive yield make it appealing for conservative investors.

2. NextEra Energy (NYSE: NEE)

NextEra Energy distinguishes itself with an impressive 11% annualized growth rate in dividends over the past ten years, significantly above average for utilities. The company has successfully increased its dividend every year for 30 years, combining a solid regulated utility base with a strong push into renewable energy sources.

Despite a current dividend yield of 2.6%, which is slightly below the industry average, the overall growth potential from clean energy investments suggests continued appeal among dividend growth investors.

3. Eversource Energy (NYSE: ES)

With a market cap of $23 billion, Eversource Energy shows a mixed outlook. Although its operational footprint is extensive, it doesn't lead in any particular area. However, its stock is currently priced attractively with a 4.3% dividend yield, which is one of the highest in its history.

The company has projected a 5% to 7% growth in earnings, indicating potential for dividend growth as well. This could appeal to value investors, especially considering the negative market sentiment surrounding recent challenges.

Conclusion

In summary, the report suggests that Black Hills offers reliability, NextEra Energy provides impressive growth opportunities, while Eversource Energy represents a potentially undervalued option. Each company has distinct features that cater to varying investor preferences in the utility sector.

Stocks: BKH NEE ES