Unlocking Hidden Gems in the Utility Sector
When it comes to growth, the utility sector often takes a backseat. However, there are exceptions to this rule, and Brookfield Renewable, NextEra Energy, and American Water Works are three shining examples. These companies may be lumped together with their slow-growing peers, but they offer something unique: dividend growth.
Brookfield Renewable: A Renewable Energy Powerhouse
With a 5.6% yield and a 6% annualized dividend growth rate since 2001, Brookfield Renewable is an attractive option for income seekers. The company’s focus on renewable energy, including hydroelectric, solar, wind, and storage assets, positions it for long-term growth. As the world shifts towards cleaner energy sources, Brookfield is poised to capitalize on this trend.
NextEra Energy: A Mix of Tradition and Innovation
NextEra Energy offers a 2.6% yield and an impressive 10% annualized dividend growth rate over the past decade. The company’s mix of traditional regulated utility assets and clean energy investments makes it an appealing choice. With a target of 10% dividend growth through 2026, NextEra Energy is an excellent option for those seeking both income and growth.
American Water Works: Essential Infrastructure
American Water Works may not boast the highest yield at 2.2%, but its 10-year annualized dividend growth rate of nearly 10% makes it an attractive choice. As the largest publicly traded water utility, the company is poised to benefit from the need for massive upgrades to the U.S. water system. With a five-year capital investment plan of up to $18 billion, American Water Works is set to drive regulated rate growth between 8% and 9% a year.
Breaking the Mold
These three companies defy the stereotype of slow-growing utilities. They offer a unique combination of income and growth, making them stand out in a crowded sector. If you’re looking for dividend growth stocks, Brookfield Renewable, NextEra Energy, and American Water Works are worth considering as we enter November.
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