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:Clearway Energy (NYSE: CWEN): 5.4%Avista (NYSE: AVA): 5.1%Edison International (NYSE: EIX): 5.0%AES Corp (NYSE: AES): 4.7%Brookfield Renewable Partners (BEP): 4.6%

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 lead investors to buy their stocks during recessions 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 a personal one. 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, Enbridge, 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.

3 Best Utility Stocks for 2026 and How to Invest

By Matthew DiLallo – Updated Aug 14, 2026 at 9:22 AM EST | Fact-checked by Frank Bass

Key Points

Utility stocks benefit from steady demand as they provide essential services like electricity, gas, and water.
These stocks generally deliver stable earnings in recessions due to regulated rate structures and take-or-pay contracts.
Investors favor utilities for their predictable earnings and dividends, making them ideal for income-focused portfolios.

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Ticker Information Table
Name and ticker	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Dividend yield	Industry
American Water Works (NYSE:AWK)	$27.1 billion	2.53%	Water Utilities
Enbridge (NYSE:ENB)	$112.2 billion	5.42%	Oil, Gas and Consumable Fuels
NextEra Energy (NYSE:NEE)	$179.9 billion	2.76%	Electric Utilities

Data as of Aug 19, 2026. Showing 3 of 3 total entries.

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American Water Works

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NYSE: AWK

American Water Works

Today's Change

(1.66%) $2.27

Current Price

$138.54

Key Data Points

Market Cap

$27B

Day's Range

$136.30 - $139.36

52wk Range

$120.57 - $147.87

Volume

1.6M

Avg Vol

2.3M

Gross Margin

43.79%

Dividend Yield

2.53%

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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 (at 19 military installations).

In late 2025, it agreed to merge with Essential Utilities (WTRG +1.74%) 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 water 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 payout ratio of 50%-60% of its adjusted EPS). Given its strong financial profile, American Water Works forecasts dividend growth that matches its earnings growth rate (7% to 9% annually). That would enable the utility to continue its streak of dividend growth. 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 yield of more than 2.5% as of mid-2026) positions it to deliver attractive total returns.

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2. Enbridge

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NYSE: ENB

Enbridge

Today's Change

(-2.24%) $-1.15

Current Price

$50.24

Key Data Points

Market Cap

$112B

Day's Range

$49.97 - $51.66

52wk Range

$45.02 - $58.45

Volume

3.6M

Avg Vol

4.4M

Gross Margin

25.44%

Dividend Yield

5.42%

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Enbridge owns a diversified portfolio of energy infrastructure businesses, built around four core franchises:

Liquids pipelines: Enbridge transports 30% of North America's crude oil.
Gas transmission: It moves 20% of the gas consumed in the U.S.
Gas distribution and storage: It delivers up to 9.3 billion cubic feet of gas per day to 7.2 million customers, making it North America's largest gas utility franchise.
Renewable power: It owns 4.1 gigawatts of contracted capacity.

The Canadian energy infrastructure giant generates very predictable cash flow (98% regulated or take-or-pay). It is so predictable that Enbridge has achieved its annual financial guidance for 20 straight years. It has also increased its dividend for 31 consecutive years (in Canadian dollars).

Enbridge has a multi-year, multi-billion-dollar backlog of commercially secured expansion projects that should enter service through the early 2030s. They include several gas utility expansions and renewable energy projects. Enbridge's backlog drives its expectation of delivering around 5% annual cash flow per share growth. That should allow it to continue growing its nearly 5.5%-yielding dividend.

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3. NextEra Energy

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NYSE: NEE

NextEra Energy

Today's Change

(-0.25%) $-0.22

Current Price

$86.01

Key Data Points

Market Cap

$180B

Day's Range

$85.58 - $86.83

52wk Range

$69.24 - $98.75

Volume

4.9M

Avg Vol

11.6M

Gross Margin

35.80%

Dividend Yield

2.76%

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NextEra Energy is the largest electric power and energy infrastructure company in North America. It owns Florida Power & Light, the country's largest electric utility. Additionally, it owns NextEra Energy Resources, one of the largest energy infrastructure development companies in the country, which operates natural gas pipelines, electricity transmission lines, and renewable energy projects. These businesses supply NextEra with steady cash flow to support its dividend and invest in expanding its utility business.

The electric utility expects its investments to grow its adjusted EPS by more than 8% annually through 2035. That's faster than the EPS growth rate projections of its largest peers in the electric utilities sector, which are in the low- to mid-single digits. NextEra Energy is investing heavily to support surging U.S. power demand. For example, it's partnering with Brookfield (BN +0.20%) in a $100 billion project to build gas-fired power and battery storage capacity to support a large-scale data center campus.

NextEra is about to become an even larger utility. It agreed to buy fellow electric utility Dominion Energy (D -0.28%) in a nearly $67 billion deal in 2026. The merger will create the world's largest regulated electric utility. It will accelerate NextEra's earnings growth to 9%+ annually through 2035.

These growth investments put NextEra Energy in a strong position to continue increasing its dividend, which it has done for more than 30 straight years. It plans to grow its dividend (which yielded nearly 3% in mid-2026) by around 6% annually in 2027 and 2028, with ample power to continue increasing it over the coming decade. NextEra's combination of dividend income and earnings growth positions it to deliver robust total returns over the next decade.

How to invest in utility stocks

Here's a step-by-step guide on how to add utility stocks to your portfolio:

Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for the utility stock: Enter the ticker (AWK, ENB, NEE) into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in utility stocks

Investing in utilities has its benefits and risks. Some of the pros include:

Above-average dividend income.
Lower volatility.
Predictable revenue and earnings.
Steady growth.
Recession-resilient investment.

Meanwhile, some of the cons of investing in utility stocks are:

Slower growth.
Lower return potential.
Higher debt levels.
More sensitive to changes in interest rates.
Regulatory risks.

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Methodology: How these stocks were chosen

There are over 100 utility stocks listed on U.S. exchanges. They range in size, focus (electric, water, or gas), growth profiles, and financial strength. These utility stocks stood out as the largest, most financially sound companies with strong growth profiles across those three utility service categories.

Should you invest in utility stocks?

Utilities are benefiting from two major tailwinds. First, the shift to cleaner energy is prompting companies to invest in natural gas, nuclear power, and renewables. Second, electricity demand is rising as electric vehicles, automation, and AI data centers use more power. Both trends support long-term infrastructure spending and growth.

Strong utility companies pair these growth drivers with solid finances, enabling them to invest in expansion while raising dividends. With steady demand, regulated pricing, and ongoing infrastructure needs, leading utilities can grow earnings even in slower economies. For investors seeking income and relatively stable growth, that combination can be appealing.

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Investing in utility stocks: FAQ

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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.

3 Best Utility Stocks for 2026 and How to Invest

Key Points

American Water Works

NYSE: AWK

Key Data Points

2. Enbridge

NYSE: ENB

Key Data Points

3. NextEra Energy

NYSE: NEE

Key Data Points

How to invest in utility stocks

Benefits and risks of investing in utility stocks

Methodology: How these stocks were chosen

Should you invest in utility stocks?

Related investing topics

Best Water ETFs for 2026 and How to Invest

5 Best Energy Stocks for 2026 and How to Invest

5 Best Solar Energy Stocks for 2026 and How to Invest

Best Nuclear Energy Stocks for 2026 and How to Invest

Investing in utility stocks: FAQ

About the Author

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Stocks Mentioned

Motley Fool Stock Advisor’s Latest Pick

Premium Investing Services

NYSE: AWK

Key Data Points

Best Water ETFs for 2026 and How to Invest

5 Best Energy Stocks for 2026 and How to Invest

5 Best Solar Energy Stocks for 2026 and How to Invest

Best Nuclear Energy Stocks for 2026 and How to Invest

Investing in utility stocks: FAQ

American Water Works

2. Enbridge

3. NextEra Energy

Benefits and risks of investing in utility stocks

Methodology: How these stocks were chosen

Should you invest in utility stocks?

Related investing topics

Three top utility stocks for 2026

NYSE: ENB

Key Data Points

NYSE: NEE

Key Data Points

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?

How to invest in utility stocks