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Best Utility Stocks to Buy in 2022

Author: Mir Kamrul

In the Best Utility shares to Buy in 2021, we will take a look at the top 10 utility companies that are potential investment targets in 2021 with reliable investment guidance.

We get electricity, natural gas, and water through utilities to industries, commercials, and governments. Therefore, there is a steady demand in this service that influences investors to generate stable earnings over the year.

Moreover, utilities have reliable profits that allow companies to pay a higher dividend than the average yield. 

Therefore, the stable growth, predictable profitability, and business operation allow investors to consider utility stocks as a low-risk option.

Where Can I trade Utility Shares?

Buying utility shares is straightforward, where you have to choose a source that will connect you to the market.

Brokers usually work as a bridge between the market and traders. Therefore, the best way to start trading is by opening an account with a broker that allows trading in utility shares.

However, you can take your trading life hassle-free by choosing a broker that has the maximum quality. We've shortlisted the best utility stocks to buy in 2022 and you can start trading them in our recommended brokers by clicking on the buttons of the following table.

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E.ON was founded in 1923 and is headquartered in Germany.
Market Cap of 22.29B as of February 2021.
E.ON dividend payout has increased four times in the last 10 years.
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Full regulations list:
Centrica (CNA)
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Centrica was founded in 1995 and is headquartered in United Kingdom.
Listed on the London Stock Exchange.
Market Cap of 3B as of February 2021.
Payment Methods
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NRG Energy Inc (NRG)
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NRG Energy, Inc. was founded in 1989 and is headquartered in New Jersey.
Market Cap of 9.35B as of February 2021.
NRG Energy, Inc has had a strong return over the last years.
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Vistra Corp (VST)
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Vistra Corp. was founded in 1882 and is headquartered in Texas.
Market Cap of 11.27B as of February 2021.
Trading at a 52-Week High.
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Sempra Energy (SRE)
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Sempra Energy was founded in 1998 and is headquartered in California.
Market Cap of 35.64B as of February 2021.
A prominent player in the Utility industry.
Payment Methods
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What Are Utility Shares?

Utility shares are company shares from the utility sector. The utility sector includes gas, water, alternative energy producers, electric companies, solar, and ethanol producers.

In utility companies, there are both service implementation and maintenance. Therefore, utility shares are very lucrative for investors as their service is stable and reliable in any circumstances.

Utility sectors work as a path to economic recovery that fluctuates with the commodity price, like natural gas, oil, coal, etc.

Utility companies require a vast infrastructure to pass a massive barrier for new firms. As a result, new investors may see a legal monopoly where a company with a gigantic infrastructure dominates the market.

Overall, compared to the other sectors, utility sectors growth is easy to identify for investors.

How to Trade and Invest in Utility Shares?


Step 1 - Open a trading account

At first, you have to open a trading account with a broker by clicking on the new account option. After that, you have to fill up a form that includes your name, email address, address, profession, experience, etc.


Choose The Market

After opening the account, you can see a list of trading assets on the trading platform. Therefore, you can select utility shares from the list. Fund your account and analyze the price based on a reliable trading strategy before placing the trade.


Place your trade

After getting the suitable utility stock, it is time to make the trade. In CFD trading, you can take both buy and sell positions in an asset. Therefore, make sure to maintain a risk management system and open the position.

Top 10 Utility Shares to Trade

Let's have a look at the list of 10 utility shares to trade in 2021, including why you should buy these:

  1. American Water Works [AWK]
  2. AES Corp. [AES]
  3. DTE Energy [DTE]
  4. Ideacorp [IDA]
  5. Entergy [ETR]
  6. Natural Fuel Gas [ETR]
  7. NRG Energy [NRG]
  8. NiSource [NI]
  9. Sunnova Energy [NOVA]
  10. Vistra [VST]

Let's have a look at why you should invest in the top 10 utility shares in 2021:

American Water Works [AWK]

American Water Works [AWK] is one of the biggest publicly traded water and wastewater utilities in the US. The primary revenue source of the company is from regulated water and wastewater service. 

American Water Works has a market capital of 29.167B with a PE ratio of 44.08. Moreover, the company expects the earnings per share to increase by 7% to 10% between 2020 and 2024. The projection includes the post-Covid business activity and the expansion of its regulated operation.

The water utility sector has the financial flexibility to support business expansion. Therefore, the AWK stock has a higher possibility of gaining bullish momentum throughout 2021, considering the business expansion and forecasted dividend growth.

AES Corp. [AES]

AES Corp. is another large utility stock with a market value of $17.57 billion.  This company is located in Virginia but works as a diversified utility company across South America, Europe, and Asia. 

AES's strength is the wide range of fuels and technologies to generate natural gas, oil, coal, electricity, wind, and biomass. Therefore, this company's diversified business portfolio may attract investors to consider it as a low-risk stock. 

DTE Energy [DTE]

DTE Energy is a utility company with more than 2 million commercial residential and industrial customers in Michigan. This company serves Detroit based utility that makes it one of the larger positions on the list. 

The current market value of DTE Energy is $23.4 billion, with a 3.6% Dividend Yield. Moreover, the recent two big earnings were surprising for investors in 2020. Therefore, in 2021, DTE Energy is one of the top utility stocks in 2021 that may provide a strong momentum into 2021.

Ideacorp [IDA]

Ideacorp is an electric utility company that made an almost 20% loss on its stock during the COVID-19 pandemic with a full bullish potentiality. The current market value of Ideacorp is $4.5 billion, with a Dividend Yield of 3.2%. 

The company serves hydroelectric dams, coal-fired power plants, and natural gas to almost 600k customers. In October 2020, the company reported a 13% gain in YoY profits that created room for further growth in 2021.

Entergy [ETR]

Entergy maintains a robust regional monopoly that makes other companies challenging to disrupt the operation. Moreover, this company has diversified the portfolio in natural gas, nuclear, coal, hydro, oil, and solar power companies.

Entergy has an $18.9 billion market value with a 4.0% Dividend yield that may attract investors to consider it a substantial investment opportunity in 2021.

Natural Fuel Gas [NFG]

Natural Fuel Gas operates in multiple segments, including supply chain exploration, oil and gas production, transportation, and electric utility operation. Natural Fuel Gas's current market value is $3.9 billion, with a Dividend Yield of 4.2%. Coming to the earnings, the company showed positive gains in 2019 with a $2.92 per share, increased by 28% to $3.73 in 2020. 

The company is currently expected to earn $4.15 per share that may encourage investors to consider this company in the list.

NRG Energy [NRG]

NRG Energy delivers electricity to almost 4 million customers, from old-school coal plants to nuclear generators. The company's current market value is $10.1 billion, with a Dividend Yield of 2.9%. NRG Energy serves energy to densely populated areas with a stable result.

Moreover, the company ended 2020 with a profit despite the COVID-19 pandemic. The current revenue expectation for 2021 is 17%, influencing investors to consider it a substantial buying opportunity.

NiSource [NI]

NiSource is a natural gas distributor to 3.5 million customers for heating, hot water, and cooking. Moreover, it provides electricity to additional 500,000 customers through its gas-fired power plant.

The current market value of NiSource is $8.6 billion, with a 3.7% Dividend Yield. Moreover, the company focuses on business diversification from Ohio to Virginia. 

Based on the current bullish outlook in natural gas, NiSource stock has a higher possibility of moving upside in 2021.

Sunnova Energy [NOVA]

Sunnova Energy ended 2020 with a business expansion in the residential solar energy business that may extend in 2021.

NOVA has a history of providing a massive return to investors, projecting a quadrupling of its earnings till 2020. Moreover, the company has a robust projection of delivering more than 25% earnings growth in fiscal 2020 and 35% more in 2021. Therefore, NOVA is another utility stock that you may consider as an investment opportunity in 2021.

Vistra [VST]

Vistra is an electricity and natural gas provider to customers in almost 20 states to more than 5 million customers. The company has a $10.6 billion market value with a 2.5% dividend yield. However, during the pandemic, the VST stock lost 40% from its early 2020 gain.

Based on the last 18 months activity from the middle of 2019, the company has a higher possibility of showing a bullish gain in the stock throughout 2021.

Expert Tip on Investing In Utility Shares

The majority of the utility companies that we have mentioned in the above section have a strong industry position. Therefore, if you want to get stable growth in your portfolio with low risk, trading on utility stocks is a good option. However, while trading on the financial market, you should increase the trading probability by using an appropriate strategy based on technical or fundamental analysis. Moreover, timing is crucial for trading utility shares. Focus on stocks that have a strong fundamental background with bullish possibilities. Usually, buying stock from a strong support level is the most beneficial option to trade in the financial market.
- Mir Kamrul

Why Invest in Utility Shares?

Utility companies are monopolies with little competition compared to other major industries. Moreover, it requires a lot of capital and infrastructure to build a utility company, which often makes it difficult for new companies to enter the market.

In the utility sectors, there are government-set rates that ensure the profitability of investors. In financial trading, stable and affordable growth is the most expected return that is possible. Regulators set companies expenses that can ensure a necessary level of sales. Based on the customers and their usage, regulators set the base production rate directly linked to profit.

Utility companies are connected to every citizen's needs and services. Therefore, they usually don't go out of their business. Moreover, they pay a large portion of their earnings in the dividend, usually 60 to 80 percent of their annual profits. Overall, utility stocks are a reliable source for portfolio diversification, so if you want to build a stable return through 2021, you can focus on the top 10 utility shares mentioned above.

Frequently Asked Questions

  1. The number one utility stock is "American Water Works."
  2. Based on the business growth and stability, utility is a good investment right now.
  3. Among 10 companies, American Water Works is the financially strongest company.
  4. Investors who focus on reliable earnings with low-risk focus on utility shares.
  5. Yes, utility shares are a good investment option for beginners.
  6. Utility shares provide solid growth over the year with low risk.
  7. Utility shares are traded 24/5.
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