9 Great Utility Stocks to Buy for Income

Reliable dividends for investors.

When investors think of low-risk investments, they often think of utility stocks. Why? The most basic necessities of food, water and shelter are closely tied to energy to refrigerate food, heat your water and light up your house. When times get tough it's much easier to cut back on discretionary spending like travel or apparel than it is to materially reduce your energy use. It gets dark at night and it gets cold in the winter regardless of the broader economy. Income investors are particularly drawn to energy utilities because consistent demand fuels consistent profits -- and regular dividends are the result. These nine companies offer that kind of reliable dividend potential.

Exelon (ticker: EXC)

Exelon is one of the largest utilities in the U.S., with a $46 billion market valuation and key service areas that include areas around Chicago, Philadelphia and Washington, D.C. This focus on key urban centers provides a consistent baseline of demand and ensures the relevance of EXC for many years to come. Exelon may never post breakneck growth, since it's already mature. It's focus on energy efficiency makes it unlikely that demand will increase significantly in the years to come. However, this mega-utility fits the bill if you're looking for a stable dividend stock.

Current yield: 3 percent

Duke Energy (DUK)

Duke is another big-time utility stock that has the scale and stability that many investors are looking for. In fact, it's even bigger than EXC with a whopping $62 billion market cap and a massive service area that covers 7.2 million customers from Florida to the Midwest, as well as smaller operations in Latin America and Canada. Duke Energy stock has had a good run in the last year, rising 15 percent, thanks to investor optimism over its spending on grid modernization, pipeline expansion and investment in renewable energy. Income investors have also been pleased as 2018 marked the 14th consecutive year of dividend increases for the power giant.

Current yield: 4.2 percent

Dominion Energy (D)

Dominion took a hit in early 2018 over a proposed all-stock merger with a South Carolina utility that raised plenty of questions from regulators, consumers and investors. But while the roll out of the plan got a cold reception, Dominion has corrected its course in the last several months. In 2019, the deal was finalized at last. With all the red tape behind Dominion, the coming year is a chance to implement cost savings to benefit shareholders and further strengthen the $57 billion utility's operations across the Mid-Atlantic region -- and continue stability for its dividend, too.

Current yield: 4.7 percent

FirstEnergy (FE)

FirstEnergy may be a stock that doesn't sit well with some income investors, since the company cut its dividend in 2014 to provide a more sustainable structure going forward. However, late last year FE raised the payout for the first time since that reduction -- a good sign of things to come. FirstEnergy serves about 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York. It may not be as big as other utility stocks on this list, but given its reach across geographies and its significant market cap of $20 billion or so, FirstEnergy remains a solid income investment despite its checkered past.

Current yield: 3.5 percent

National Grid (NGG)

National Grid is a rare multinational utility, with operations based in the U.K. and a footprint in the American Northeast after its 2007 acquisition of KeySpan in Massachusetts, New Hampshire, New York and Rhode Island. This gives an interesting layer of geographic diversification to what is already a fairly low-risk investment thanks to strong baseline demand in both the U.S. and U.K. At roughly $38 billion, NGG is one of the largest and most entrenched utility options.

Current yield: 5.7 percent

Oneok (OKE)

While many income investors first think of the largest electric utilities as ways to access low-risk dividends, natural gas giant Oneok also has a lot to offer. Headquartered in Oklahoma with operations in 14 states across the Midwest, OKE is a great example of finding yield outside the conventional offerings. Just don't confuse OKE stock with its subsidiary Oneok Partners (OKS), a midstream energy pipeline business. Both have robust dividend yields, but the partnership does not serve retail customers.

Current yield: 5.2 percent

AmeriGas Partners (APU)

Keeping with overlooked utilities that don't focus on electricity, AmeriGas is one of the largest propane distributors in the U.S. That includes tanks for grills as well as residential use for heating and even agricultural to fuel irrigation systems. The Pennsylvania-based stock covers all 50 states in some form through a massive network of 1,900 distribution facilities. It's safe to say that if someone in America regularly uses propane, they've likely been a customer of APU. That kind of scale adds up to reliable revenue, and since APU is structured as a profit-sharing partnership, that also means reliable dividends.

Current yield: 12.7 percent

COPEL (ELP)

For investors who really want to branch out, there's Latin American utility Companhia Paranaense de Energia -- or COPEL for short. This Brazil-based electricity provider is a respectable $2 billion in market value and books more than $4 billion in annual revenue. Unlike many of the developed utilities in the U.S. and Europe, which are highly regulated and face a near impossibility of significant growth, this utility has the opportunity to expand and thrive as it is in a dynamic emerging market that likely will see increased consumer and industrial demand. Just keep in mind shares follow an irregular dividend cycle instead of paying quarterly like U.S. utilities.

Current yield: 3.2 percent

AES (AES)

If you want to split the difference between domestically run utilities and emerging markets, AES is an interesting option. The company is located in Virginia, but provides power generation services across 16 different countries from Europe to South America and Asia. Shares have been on a tear since early 2016, roughly doubling compared with about 30 percent gains for the broader S&P 500 in the same period. But this $12 billion corporation also sticks to the generous dividend philosophy of most other electricity providers, and has grown its dividend roughly three times since 2014.

Current yield: 3.2 percent

9 great utility stocks to buy for income.

Here is a list of nine utility stocks that dividend investors should consider:

-- Exelon Corp. (EXC)

-- Duke Energy Corp. (DUK)

-- Dominion Energy (D)

-- FirstEnergy Corp. (FE)

-- National Grid (NGG)

-- Oneok (OKE)

-- AmeriGas Partners (APU)

-- COPEL (ELP)

-- AES Corp. (AES)