2 Utility Stocks to Buy Before the Bear Market Is Over
Bear markets are a test for investors, given that elevated levels of fear can lead to detrimental short-term thinking. The bear is still with us, but it's not too late to start thinking about the long term. Utility Dominion Energy (NYSE: D) is a good option for dividend growth-minded investors. Peer Consolidated Edison (NYSE: ED) is appropriate for investors who have a safety-first mentality.
Dominion Energy cut its dividend in 2020 after selling a large chunk of its business (pipelines) to Berkshire Hathaway. It was the final step in the company's effort to shed its non-regulated business segments and become a wholly regulated utility business, not a result of the coronavirus pandemic. That timing was just a coincidence. Now, after the reset, the utility company is focused on investing in its assets to ensure system reliability. An effort that also helps it justify rate hikes to regulators.
The numbers are sizable, with a $37 billion capital investment plan over roughly the next five years. About 85% of that spending is for clean energy, and 75% should slide right into rates without having to get approved. In other words, there's a fair amount of clarity for the future at Dominion right now.
Source Fool.com
