Dominion Energy’s dividend yield (D) of 4.9% leads among top utilities. The yield is higher than its five-year average, ~230 basis points higher than ten-year Treasury yields, and ~300 basis points higher than broader markets’ yields.
NextEra Energy’s (NEE) yield of 2.6% is lower than broader utilities’ (XLU) average yield of 3.1%. Top regulated utility stocks Southern Company (SO) and Duke Energy (DUK) yield 4.8% and 4.2%, respectively.
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Despite its low yield, NextEra Energy’s dividend profile looks attractive due to its solid dividend growth. At ~11% compounded annually in the last five years, its dividend growth its double utilities’ average.
Dominion Energy’s dividend growth has also increased handsomely in the last five years, by ~8% compounded annually. NextEra’s and Dominion’s superior earnings growth has given them above-average dividend growth.
Meanwhile, Duke Energy’s and Southern Company’s five-year dividend growth has been lower than the industry average, despite the companies drawing most of their earnings from regulated operations. Such operations usually facilitate steady and predictable earnings, securing dividends.