3 Dividend Champion Utilities for a Market That Can't Sit Still

Key Points

• Amid market volatility and a new S&P 500 high, three utility stocks passed a screen for yield, payout ratio, and dividend growth consistency.
• Consolidated Edison offers the steadiest, lowest-volatility dividend with a 52-year increase streak, though its growth and share gains remain limited.
• New Jersey Resources and MGE Energy provide stronger dividend growth and capital appreciation potential, backed by solid earnings and low payout ratios.

The S&P 500 finally made a new all-time high on Aug. 4, its first new record in more than two months. But while the index was notching its high, the volatility index (VIX) also spiked 4%, indicating a flurry of options activity under the market’s surface.

Inflation is still elevated, the war in Iran is grinding on, and tech valuations are in nosebleed territory, so what’s a risk-averse investor to do? Turn to the utility sector, with its low-beta, dividend-paying stocks. In this exercise, we’re looking for the cream of the crop, so each company must pass a three-part screen:

• Minimum 2% yield

• Maximum 60% dividend payout ratio (below industry average)

• Minimum 25 years of consecutive annual payout raises

This screen provides us with dividends that have typically outpaced inflation, have headroom for future increases, and have grown during calamities such as the 2001 Dot-Com meltdown and the 2008 Financial Crisis. Here are the three utility stocks that passed the test.

Consolidated Edison: The Anchor of a Dividend Portfolio

One of the main suppliers of energy to New York City, Consolidated Edison Inc. NYSE: ED, is the largest utility on our list with a market cap just under $40 billion and about $17 billion in annual sales. Being a New York utility company means sacrificing some growth, and ED shares are often considered a “bond-like” instrument—for good reason.

The stock has an incredibly low beta of 0.27, meaning a 10% drop in the S&P 500 correlates to only a 2.7% drop in ED shares. Likewise, you won’t capture much market upside as an ED investor, but you will get the steadiest dividend in the industry.

Consolidated Edison declared its 52nd consecutive dividend payout increase in January, raising the quarterly payout 4.4% to 89 cents ($0.8875 to be precise). No utility in the S&P 500 can match that track record, and the payout has survived a generation of financial and economic catastrophes. The DPR sits just below our cutoff at 59.76%, but it is projected to decline to 55.21% in 2027, driven by expected earnings growth of 5.58%. This is a good sign for a utility; a rising payout with a declining DPR shows the streak isn’t being defended at the expense of the balance sheet.

However, the sacrifice for stability is growth. The dividend currently yields a healthy 3.27% but has grown only 2.13% annually on average over the last five years. New York utility rates are highly predictable, and that predictability comes at the cost of revenue expansion (and stock gains). An investment in ED will earn steady income ahead of inflation, but shares have only gained 3% in the last 12 months, so there’s not much capital appreciation to rely on.

New Jersey Resources: Lofty Yield Protected by Manageable Payout Ratio

If you want capital appreciation and income, New Jersey Resources Corp. NYSE: NJR offers a bit more upside—and a bit more earnings volatility—than a plain-vanilla utility.

The stock has gained about 20% year-to-date (YTD) but carries a 0.50 beta, meaning its 50% less volatile than the S&P 500 as a whole.

So far, the gain has been supported by earnings. NJR reported its Q3 2026 results on Aug. 3 and beat top and bottom-line estimates with 16.8% year-over-year (YOY) revenue growth.

Full-year earnings-per-share (EPS) guidance was narrowed but raised at the midpoint due to the outsized impact from the Energy Services division, which trades gas wholesale and accounts for 21-23% of earnings.

Wholesale gas trading is a noisier business than rate-controlled energy provision, which means NJR’s earnings are subject to greater quarter-to-quarter volatility than those of a typical utility, especially in the current geopolitical environment.

The good news is that the dividend remains safe and generous. The yield is currently 3.45% with a DPR of 52.49%. The growth record is strong as well: 7.4% annualized over the last five years, with a 29-year streak of dividend payout increases. The NJR payout bumps typically come in September when the fiscal year ends, so the next increase should be announced in a few weeks.

MGE Energy: High Volatility and Headroom

Moving out of the energy-hungry Northeast leads us to MGE Energy Inc. NASDAQ: MGEE, a Madison-based utility serving central and southern Wisconsin. Despite only a 3% YTD gain, MGEE has the highest beta on our list at 0.71, meaning it's only 29% less volatile than the S&P 500. It also has the lowest yield at 2.33%, but that yield has been accelerating rapidly over the last two years, and the payout rate shows there’s plenty of headroom for more.

The company boasts a DPR of 46.68%, the lowest on our screen and well below the industry average.

Dividend growth has been steady at 4.99% annualized over the last five years, and another payout boost this year will bring the company’s streak to 50 consecutive years.

That payout increase should be coming later this month, and recent earnings hint at a substantial move.

MGE Energy reported Q3 2026 results on Aug. 5 and smashed EPS expectations despite a slight miss on revenue.

Earnings are expected to grow 8% over the next 12 months, so the company could boost its dividend payout by a high-single-digit percentage while keeping the DPR under 55%.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source