What are the utility stocks with the highest dividends?

The dividend yields of utility stocks vary with their current stock prices and dividend payments. In mid-2026, five utilities with the highest dividend yields were:Edison International (NYSE: EIX): 6.6%AES Corp (NYSE: AES): 6.2%Clearway Energy (NYSE: CWEN): 5.7%Avista (NYSE: AVA): 5.2%Portland General Electric (NYSE: POR): 5.1%

Do utility stocks do well in a recession?

Utility stocks typically do well in a recession. They generate fairly stable revenue and earnings during a downturn. Demand for electricity, water, and natural gas is steady, even during a recession, while their revenue is from government-regulated sources or long-term contracts. The overall stability of utilities tends to cause investors to buy their stocks during a recession to benefit from their dividend income and stable returns.

How safe are utility stocks?

Utility stocks tend to be safer than most other companies. They typically generate very stable and steadily growing revenue, even during a session. Their revenue comes from government-regulated sources or long-term, fixed-rate contracts. Meanwhile, demand is steady during a downturn. Utilities also typically pay above-average dividends, providing investors with a solid base return.

How do interest rates affect utility stocks?

Interest rates can impact utility stocks in two distinct ways. They affect:Borrowing costs: Utilities borrow heavily to fund capital projects to maintain and expand their infrastructure and to acquire other utilities. Rising interest rates increase their borrowing costs, which can impact their ability to finance capital projects, refinance maturing debt, and make acquisitions. On the other hand, when rates fall, borrowing costs decline, making it easier for them to expand and refinance debt.Valuations: Interest rates tend to affect the values of yield-bearing investments like bonds, REITs, and utilities. When rates rise, investors can earn higher yields on lower-risk investments, such as government bonds. As a result, they demand higher yields from riskier investments, such as REITs and utility stocks, which causes their stock prices to fall and their dividend yields to rise. Conversely, when rates fall, utility stock prices tend to rise as yield-seeking investors buy more utility stocks for income.

Should I buy individual utility stocks or utility ETFs?

The decision to buy individual utility stocks or utility ETFs is personal. You need to decide whether to invest broadly in the utility sector through ETFs or to focus on finding utility stocks you believe will deliver the highest total returns.

What are the best utility stocks to own?

American Water Works, Brookfield Infrastructure, and NextEra Energy are the best utility stocks to own. They expect to grow their earnings at above-average rates in the coming years. These utilities also have strong financial profiles to support their growth and higher dividend yields (which they increase each year). Their combination of growth, yield, and financial strength makes them the best utility stocks to own.

Are utilities a good stock investment?

Yes, utilities are a good investment. They deliver very stable earnings growth due to their government-regulate rate structures and steadily growing energy demand. Utilities also tend to pay high-yielding and steadily rising dividends. This combination of slow-and-steady earnings growth and rising dividend income often adds up to a solid total investment return.

Does Warren Buffett invest in utilities?

Yes, Warren Buffett's company, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), invests in utilities. Berkshire Hathaway Energy owns several rate-regulated utilities, including PacificCorp, MidAmerican Energy Company, NV Energy, and Northern Natural Gas.

Best Utility Stocks for 2026 and How to Invest

By Matthew DiLallo – Updated May 11, 2026 at 3:05 PM EST | Fact-checked by Frank Bass

Key Points

Utility stocks offer stable revenue and dividends, making them appealing for income-focused investing.
Top utility companies like American Water Works are investing heavily in growth to enhance investor returns.
Investing in utilities with strong financials and growth prospects can yield above-average returns.

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
American Water Works (NYSE:AWK)	$24.9 billion	3.29%	Water Utilities
Brookfield Infrastructure (NYSE:BIPC)	$5.4 billion	4.30%	Gas Utilities
NextEra Energy (NYSE:NEE)	$197.3 billion	2.46%	Electric Utilities

Data as of May 13, 2026. Showing 3 of 3 tickers.

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American Water Works

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NYSE: AWK

American Water Works

Today's Change

(-0.22%) $-0.28

Current Price

$127.37

Key Data Points

Market Cap

$25B

Day's Range

$125.46 - $127.67

52wk Range

$121.28 - $147.87

Volume

1.7M

Avg Vol

1.9M

Gross Margin

43.25%

Dividend Yield

3.29%

American Water Works is the largest publicly traded water and wastewater utility in the U.S. It makes most of its money by providing regulated water and wastewater services to retail, commercial, and industrial customers (14 million people across 14 states). The rest of its earnings come from less-predictable market-based activities, including providing water-related services to homeowners and the military (18 military installations).

In late 2025, it agreed to merge with Essential Utilities (WTRG -0.28%) to form an even larger utility company with an enterprise value exceeding $60 billion. Essential Utilities operates the Aqua and Peoples brands, serving 5.5 million people across nine states with water, wastewater, and natural gas services. American Water Works expects to close the merger by the end of the first quarter of 2027.

American Water Works expects the combined company will grow its earnings per share (EPS) at a 7% to 9% compound annual rate over the long term, making it one of the fastest-growing utilities in the country. Driving that outlook is its plan to invest billions of dollars annually to expand its regulated water utility operations through capital investments and acquisitions.

The water utility has the financial flexibility to support its expansion plan thanks to its top-tier financial profile. It has an investment-grade credit rating, allowing it to borrow at lower rates and on better terms.

It also has a very conservative dividend payout ratio (it has targeted an average of between 50% and 60% of its adjusted EPS). Due to its strong financial profile, American Water Works forecasts dividend growth matching its earnings growth rate (7% to 9% annually). That would enable the utility to continue its dividend growth streak. It has raised its dividend every year since going public in 2008. American Water Works' combination of earnings growth and dividend income (it had a nearly 3% yield as of May 2026) positions it to produce attractive total returns.

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2. Brookfield Infrastructure

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NYSE: BIPC

Brookfield Infrastructure

Today's Change

(0.05%) $0.02

Current Price

$40.61

Key Data Points

Market Cap

$5.4B

Day's Range

$39.77 - $40.80

52wk Range

$34.18 - $51.72

Volume

970K

Avg Vol

1.1M

Gross Margin

63.46%

Dividend Yield

4.30%

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Brookfield Infrastructure owns a diversified portfolio of utility-like infrastructure businesses, including:

Utilities: Regulated electric and natural gas transmission and distribution businesses, gas pipelines, electricity transmission lines, and a residential decarbonization infrastructure platform.
Transport: Railroads, toll roads, railcars, intermodal containers, terminals, liquefied natural gas (LNG) export operations, and intermodal containers supported by long-term contracts or regulated rate structures.
Midstream: Oil and natural gas midstream assets (e.g., pipelines, storage, and processing) backed by long-term contracts or regulated rates.
Data: Data centers, cell towers, semiconductor foundries, and fiber-optic networks supported by long-term contracts with customers.

Brookfield Infrastructure operates several utilities and utility-like businesses that generate predictable cash flow that grows over time. The company benefits from inflation-linked rate escalations, higher volumes as the economy expands, and its ability to complete expansion projects.

Brookfield believes these organic growth drivers alone can support dividend growth of 5% to 9% annually over the long term. It increased its dividend by another 6% in early 2026, its 17th straight year of growth.

In addition to organic growth, Brookfield anticipates that new investments can further boost its earnings each year. In 2025, the company agreed to invest $1.5 billion in a leading refined products pipeline system, a bulk fiber provider, a railcar leasing platform, a natural gas infrastructure business, and an industrial gas business. It also formed an industrial leasing platform and a behind-the-meter power framework agreement. These businesses generate highly stable utility-like cash flows, supported by government-regulated rate structures and long-term contracts. When added to its organic growth drivers, new investments can help fuel 10%+ annual funds from operations (FFO) per share growth in the coming years. Combine that with its more than 4.5% yield (as of May 2026), and Brookfield Infrastructure has powerful total return potential.

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3. NextEra Energy

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NYSE: NEE

NextEra Energy

Today's Change

(0.28%) $0.26

Current Price

$94.85

Key Data Points

Market Cap

$197B

Day's Range

$93.31 - $95.40

52wk Range

$63.88 - $98.75

Volume

159K

Avg Vol

9.5M

Gross Margin

36.10%

Dividend Yield

2.46%

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FAQ on utility stocks

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About the Author

Matt DiLallo has been a contributing Motley Fool stock analyst specializing in the energy, industrials, and real estate sectors since 2012. He also covers dividend-paying stocks, pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

TMFmd19

@MatthewDiLallo

Matt DiLallo has positions in Brookfield Infrastructure and NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.

Best Utility Stocks for 2026 and How to Invest

Key Points

American Water Works

NYSE: AWK

Key Data Points

2. Brookfield Infrastructure

NYSE: BIPC

Key Data Points

3. NextEra Energy

NYSE: NEE

Key Data Points

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FAQ on utility stocks

About the Author

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Stocks Mentioned

Premium Investing Services

FAQ on utility stocks

What are the utility stocks with the highest dividends?

Do utility stocks do well in a recession?

How safe are utility stocks?

How do interest rates affect utility stocks?

Should I buy individual utility stocks or utility ETFs?

What are the best utility stocks to own?

Are utilities a good stock investment?

Does Warren Buffett invest in utilities?

American Water Works

2. Brookfield Infrastructure

3. NextEra Energy

How to invest in utility stocks

Benefits and risks of investing in utility stocks

Should you invest in utility stocks?

Related investing topics

FAQ

Three top Utility stocks for 2026

NYSE: BIPC

Key Data Points

NYSE: NEE

Key Data Points