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3 Utility Stocks to Weather Market Storms

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3 Utility Stocks to Weather Market Storms

Pain at the pump, sticker shock at the grocery aisle, the Russian invasion of Ukraine, ongoing problems with COVID-19 (another strain was just unearthed!) and… ugh, need we go on? 

We've seen just about everything at the start of this year… sharp sell-offs in the S&P 500 and near-bear market territory in the Nasdaq, then a trip into positive territory. It's like a rodeo out there.

It's time to make a list of certain things consumers can't go without, including food, shelter and utilities, like electricity and water. Let's go into why you may want to buy utility stocks and a few to put tabs on for your own portfolio.

Why Buy Utility Stocks?

There's a few other reasons to consider utility stocks besides the fact that consumers need them on a consistent basis. Utilities generate reliable earnings and also pay dividends with above-average yields. Predictable profitability. Tantalizing yields. A few good reasons to load up, wouldn't you say? 

3 Utility Stocks to Consider

Let's take a look at some we've put our fingers on and why you might want to consider them for your portfolio.

NextEra Energy Inc. NYSE: NEE

NextEra Energy Inc., headquartered in Juno Beach, Florida, is no stranger to our lists. The company generates, transmits, distributes and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal and natural gas facilities. NextEra also delves into clean energy solutions, such as renewable generation facilities, battery storage projects and electric transmission facilities. It also sells energy commodities and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets. At the end of Q4 2021, it had 28,564 megawatts of net generating capacity, 77,000 circuit miles of transmission and distribution lines and 696 substations. It serves approximately 11 million people in the east and lower west coasts of Florida. 

NextEra reported Q4 2021 net income attributable to NextEra Energy on a GAAP basis of $1,204 million, or $0.61 per share, compared to net losses attributable to NextEra Energy of $5 million, or $0 per share, in Q4 of 2020. NextEra Energy's 2021 Q4 earnings were $814 million, or $0.41 per share, compared to $785 million, or $0.40 per share, in Q4 2020.

NextEra Energy reported net income attributable to NextEra Energy on a GAAP basis of $3.573 billion, or $1.81 per share for the full year 2021, compared to $2.919 billion, or $1.48 per share, in 2020. NextEra Energy's full-year 2021 earnings were $5.021 billion, or $2.55 per share on an adjusted basis, compared to $4.552 billion, or $2.31 per share in 2020. This represents year-over-year growth in adjusted earnings per share of approximately 10.4%.

Waste Management Inc. NYSE: WM

Waste Management Inc., headquartered in Houston, Texas, is a holding company that provides waste management environmental services. It operates throughout the southern, Midwest and northeast United States as well as the northwest and Mid-Atlantic regions of the United States and Eastern Canada. 

Total company volumes increased 2.8% in Q4 2021, or 2.3% on a workday adjusted basis, compared to a decline of 2.6% in Q4 2020. Operating expenses as a percentage of revenue were 63.2%, or 63% on an adjusted basis in Q4 of 2021, compared to 61.5% in Q4 2020 due to higher commodity prices for recyclables and higher risk management costs. For the full year, operating expenses as a percentage of revenue were 62%, or 61.9% on an adjusted basis, compared to 61.4% in 2020.

Operating EBITDA was $1.39 billion, or 31% of revenue for Q4 2021, compared to $1.28 billion, or 31.6% of revenue, Q4 2020. Operating EBITDA in the Company’s collection and disposal business was $5.52 billion in 2021, or 31.6% of revenue compared to $4.85 billion, or 31.9% of revenue, for the full year 2020.

Operating EBITDA in WM’s recycling business improved by $44 million and operating EBITDA in the company’s recycling line of business improved by $186 million. Operating EBITDA in the company’s renewable energy business improved by $18 million in Q4, primarily driven by increases in the value of renewable fuel standard credits. Operating EBITDA improved by $81 million.

Net cash provided by operating activities was $991 million compared to $753 million in Q4 2020. 

Sempra Energy NYSE: SRE

Sempra Energy, headquartered in San Diego, is an energy-service holding company that develops and operates energy infrastructure and provides electric and gas services, including natural gas distribution, transmission and storage systems as well as natural gas and pipeline facilities. It operates through San Diego Gas and Electric Company (SDG&E), Southern California Gas Company (SoCalGas), Sempra Texas Utilities, Sempra Mexico and Sempra LNG. 

Sempra had full-year 2021 earnings of $1.25 billion, or $4.01 per diluted share, compared to full-year 2020 earnings of $3.76 billion, or $12.88 per diluted share. On an adjusted basis, the company's full-year 2021 earnings were $2.64 billion, or $8.43 per diluted share, compared to $2.34 billion, or $8 per diluted share in 2020.

In Q4 2021, Sempra reported earnings of $604 million, or $1.90 per diluted share, compared to $414 million, or $1.43 per diluted share, in Q4 2020. On an adjusted basis, Q4 earnings were $688 million, or $2.16 per diluted share, compared to $668 million, or $2.28 per diluted share in the fourth quarter 2020.

Sempra's board of directors declared a $1.145 per share quarterly dividend on the company's common stock, which is payable April 15 to common stock shareholders of record as of March 25, 2022. The declared quarterly dividend represents an increase of the company's common stock dividend to $4.58 per share, on an annualized basis, from $4.40 per share in 2021. 

Utility Stocks: Combat Just About Anything

Utility stocks can help you battle a lot of market storms if you're looking for a way to ingrain stability into your portfolio. Take a look at a handful of utility companies to determine whether you should plug them into your portfolio. Don't forget to take a look at the dividends as well.

Should you invest $1,000 in Sempra right now?

Before you consider Sempra, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Sempra wasn't on the list.

While Sempra currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Sempra (SRE)
4.6457 of 5 stars
$75.39-0.6%3.29%16.70Moderate Buy$82.86
Waste Management (WM)
4.7458 of 5 stars
NextEra Energy (NEE)
4.69 of 5 stars
$77.53+1.2%2.66%21.13Moderate Buy$72.93
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Melissa Brock

About Melissa Brock


Associate Editor & Contributing Author

Contributing Author


Melissa Brock worked as an associate editor & contributing writer for MarketBeat from 2021 to 2024.

She currently works as a full-time freelance writer and financial editor covering higher education, investing, personal finance, mortgages, college savings, insurance, and more. 

Areas of Expertise

Dividend Stocks, Retirement


Bachelor of Arts in Communication Studies, Central College, Pella, Iowa

Past Experience

Melissa graduated summa cum laude with a bachelor of arts in communication studies with minors in psychology and Spanish from Central College. She's a longtime member of the National Association of College Admission Counseling (NACAC). While working in college admission, Melissa Brock pursued a freelance writing and editing career. 

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