The 7 Best Utility Stocks to Buy for Stable Income

Stocks to buy

A very solid strategy for an investor is to find a company that has a product that everyone needs. That’s pretty basic economic, It’s also why utility stocks can be pretty safe bets for investors who are craving a little stability.

The stock market had a nasty 2022, with the Dow Jones Industrial Average losing more than 9%. Tech stocks had it even worse. Those companies, which were long favored by growth investors, helped push the tech-heavy Nasdaq composite down 34%.

Things are a little better so far in 2023, but there’s still a lot of uncertainty in the market.

Utility stocks are less volatile than other sectors. They’re relatively recession-proof, as everyone needs to have electricity, heat and water. Utility stocks won’t give you the massive growth that you’ll see from the best growth stocks to buy, but you’ll get some stability. And that can be well worth the trade-off.

Here are some top utility stocks that are recommended by my Portfolio Grader tool.

LNG Cheniere Energy $142.29
ET Energy Transfer $11.87
ADN Advent Technologies $1.22
AES The AES Corporation $22.39
AM Antero Midstream $9.82
AQMS Aqua Metals $1.06
ARTNA Artesian Resources $51.69

Cheniere Energy (LNG)

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Cheniere Energy (NYSEAMERICAN:LNG) is a liquified natural gas stock (hence the ticker). The company, which is the largest exporter of LNG in the U.S., made serious money by shipping 70% of its LNG production to Europe in 2022. European customers were badly in need of natural gas after Moscow cut off their supply, in retaliation for the West imposing sanctions on Russia for its invasion of Ukraine.

For the fourth quarter, Cheniere brought in $9.08 billion in revenue, which was 10.1% better than it did in the same quarter a year ago. Net income was nearly $4 billion, and operating income came in at $6.78 billion. Earnings per share came in at $15.78, which was light years ahead of the consensus estimate of $4.89 per share.

The Russia-Ukraine war is now at a year and shows no signs of slowing down, so Cheniere’s export business should continue to flourish. The company is also taking care of its shareholders, repurchasing 4.4 million shares in the fourth quarter, and paying a modest dividend as well.

LNG stock has a “B” rating in the Portfolio Grader.

Energy Transfer (ET)

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Energy Transfer (NYSE:ET) is another flavor of liquified natural gas stock, but this one does most of its business in the U.S. Energy Transfer boasts 120,000 miles of pipeline in North America, stretching over 41 U.S. states.

The LNG business is profitable, even here in the U.S. ET stock is up by 25% over the last 12 months. Energy Transfer handles roughly 30% of all natural gas in North America.

ET stock trades at a fair price, even with all those headwinds. Its price-earnings ratio is 9, and the price-sales ratio is a miniscule 0.5. And if you’re looking for income, Energy Transfer’s got you covered. ET stock offers a massive dividend yield of nearly 10%.

The consensus analyst price target for Energy Transfer is $16.75, suggesting a 36% upside. ET stock has a “B” rating in the Portfolio Grader.

Advent Technologies (ADN)

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Fuel cell company Advent Technologies (NASDAQ:ADN) began trading about two years ago after a special purpose acquisition company merger with AMCI Acquisition.

While shares started at $10, today you can buy Advent for less than $2. The newly merged company’s fallen on hard times in the last six months, down by more than 60%.

But Advent has a ton of potential, and this may be an ideal buy point. The company is focusing its efforts on helping companies and governments meet carbon dioxide emission targets in the Paris Climate Accord.

Fuel cells use hydrogen-based fuels to generate electricity, cutting or even eliminating emissions of carbon dioxide and other types of pollutants.

It recently received a new order of its fuel cell system from Brandenburg, Germany, to serve as a back-up system for its digital radio network for first responders and other public safety officials.

Analysts are bullish on ADN stock, giving it a consensus price target of $9.35. ADN stock has a “B” rating in the Portfolio Grader.

The AES Corporation (AES)

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Based in Virgina, The AES Corporation (NYSE:AES) is a utility stock with a global footprint. The company generates and distributes power in 15 countries.

Besides its subsidiaries operating in Ohio and Indiana, AES has interests in Argentina, Brazil, the United Kingdom, Bulgaria, the Netherlands, Jordan, Kazakhstan, Vietnam and the Philippines.

Fourth quarter earnings continued the company’s winning streak in topping analysts’ expectations. AES reported revenue of $3.06 billion that was more than 10% better than a year ago, and nearly doubled analysts’ expectations for $1.58 billion. Earnings came in at 49 cents per share, beating expectations by 3 cents per share.

The company, which is working on a $4 billion joint venture with Air Products (NYSE:APD) in Texas to build the largest green hydrogen production plant in the U.S., forecasts growth of 7% to 9% per year through 2025.

AES stock has a “B” rating in the Portfolio Grader.

Antero Midstream (AM)

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Antero Midstream (NYSE:AM) is a midstream energy company, meaning it operates pipelines, compression facilities and water handling systems. Antero operates in the Appalachian Basin, with some interests in the Marcellus and Utica shales.

It is a top 10 producer in the U.S. of natural gas, and a top five producers of natural gas liquids. The company says it has more than 20 years of inventory.

Earnings in the fourth quarter included revenue of $241.55 million, which beat expectation for $235.91 million. It also was a 10.7% increase on a year-over-year basis. The company is guiding for 2023 full-year income to be in a range from $395 million to $435 million.

AM stock has been up and down over the last six months, nearly breaking even. But analysts have a consensus price target of $11.29, giving it a 13% runway. It also provides a dividend yield of 9%.

AM stock has a “B” rating in the Portfolio Grader.

Aqua Metals (AQMS)

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Nevada-based Aqua Metals (NASDAQ:AQMS) claims to be the only company that has a commercially proven closed-loop metal recycling process capable of producing high-quality metal.

That technology could be important as companies show greater interest in sustainable energy solutions.

Its processes include water-based recycling technology that allows it to recycle lithium-ion batteries, which are becoming more in demand because of EV growth. Its AquaRefining technology allows it to recycle lead without creating pollutants, the company says.

Yes, there’s a potentially bright future, but there are also some risks, and investors should tread carefully. Aqua Metals has yet to get to commercial production and therefore had no revenue in 2022. It ended the year with $7.1 million in cash on hand and recorded an operating loss for the year of $15.6 million.

Aqua Metals is building its first commercial scale recycling plant that will have a capacity of 3,000 of metric tons of saleable material, potentially bringing in revenue of $60 million. It’s also expecting to receive $12 million in cash this quarter from the sale of a Nevada facility.

For now, a bet on Aqua Metals is a bet on the future of lithium-ion products and the global appetite for embracing recycled goods. AQMS stock is just over $1 but has a consensus price target of $5. And it currently has a “B” rating in the Portfolio Grader.

Artesian Resources (ARTNA)

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Delaware-based Artesian Resources (NASDAQ:ARTNA) is a holding company whose subsidiaries supply water, wastewater treatment and other related services.

The company has a long history, dating back to 1905 when it was a water utility on the Delmarva Peninsula. It also operates subsidiaries in Maryland and Pennsylvania, supplying more than 8 billion gallons of water a year.

Over the last year, Artesian stock is up 14%, but what I like even more about this company is the dividend performance. Artesian pays a quarterly dividend, but it also increases the dividend like clockwork every six months. Currently the dividend yield is about 2.1%.

There’s nothing more stable than a water utility that makes it a practice to raise its dividend. ARTNA stock has a “B”’ rating in the Portfolio Grader.

On the date of publication, Louis Navellier had a long position in LNG. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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