Top utilities’ dividend profiles
The four biggest utilities by market capitalization in the S&P 500 Utilities Index (XLU)—NextEra Energy (NEE), Duke Energy (DUK), Dominion Energy (D), and Southern Company (SO)—all offer handsome dividend profiles. They also all have a strong dividend payment history and have decent dividend growth potential.
We’ll compare these utilities’ dividend profiles and try to figure out which one of them is best positioned today.
Georgia-based Southern Company currently offers the highest dividend yield of 4.7% among SPX utilities, and its dividend yield has not fallen below those of its peers in five years. Notably, the Utilities Select Sector SPDR ETF (XLU), which represents the S&P 500 Utilities Index, is now trading at a dividend yield of 3.5%.
The largest utility by market capitalization and the biggest component in XLU, NextEra Energy currently yields 2.6%, while Duke Energy, the country’s largest rate-regulated utility, yields 4.1%. Dominion Energy is now trading at a dividend yield of ~4%.
It’s notable that only NextEra Energy, the biggest of the four, is trading at a yield so much lower than the industry average. But dividend yield isn’t the only key factor to look at when assessing dividend profiles. In the next part, we’ll discuss how each utility has raised its dividend recently.