Utilities Pair a 3.23% Yield With 79% Top Safety Grades

SmarterDividends data on November 6, 2026 shows that the 75 Utilities dividend stocks in our coverage have a median yield of 3.23%, compared with 2.38% across all sectors. The sector also puts 79% of its dividend stocks in our A or B safety grades, against 70% across all sectors, combining an above-market yield with stronger payout safety.

That combination does not make Utilities uniformly defensive or inexpensive. The median earnings payout is 61%, the median five-year dividend growth rate is 5.6% per year, and only 20% of the sector trades below our fair-value estimates.

Dividend actions reinforce the safety picture without suggesting rapid income growth. Over the last six months, 23 Utilities companies raised their dividends, only 1 cut, and the median raise was 4.0%.

The yield premium varies sharply by industry

Regulated electric utilities account for 35 dividend stocks, nearly half of the 75-stock sector, and carry a median yield of 3.23%. The 13 regulated gas stocks yield a median 3.34%, while the 11 regulated water stocks sit lower at 2.64%.

The higher-yielding pockets are smaller. The 6 diversified utilities have a median yield of 4.67%, and the 6 renewable utilities reach 5.07%. The 4 independent power producers sit at the opposite end with a median yield of 1.18%.

Those industry medians separate the traditional income groups from a corner of the sector where current yield is not the main feature. Constellation Energy (CEG), an independent power producer worth $84.9 billion, yields 0.7%, carries a B safety grade and pays out 16% of earnings.

High yields can hide very different payout profiles

The higher-yielding A and B names show why yield and an earnings payout ratio need to be read together. Edison International (EIX) yields 5.8% with an A safety grade and a 37% earnings payout. Brookfield Infrastructure Partners (BIP) yields 4.8% with a B grade and a 285% earnings payout.

The grades and earnings payout ratios do not move in lockstep. Brookfield Renewable has a 108% earnings payout and a B grade, while AES has a 28% payout and an A. Portland General Electric pairs an A grade with a 92% payout, while Brookfield Infrastructure pairs a B with 16%.

Dividend growth also separates similar yields. Brookfield Infrastructure Partners and Brookfield Infrastructure each yield 4.8% and each grew its dividend 5.9% per year over five years. Avista has the same 4.8% yield but grew 3.9% per year.

Safety is broad, but value is scarce

Our Utilities coverage contains 59 stocks graded A or B, 14 graded C, and only 2 graded D or F. Yet just 20% trade below our fair-value estimates, so the sector's broad safety does not come with broad undervaluation.

American Electric Power (AEP) is one of the larger exceptions. It is worth $69.0 billion, yields 3.1%, earns an A safety grade and has a 62% earnings payout. Our model labels it undervalued with 46% upside to fair value.

National Grid (NGG) also screens as undervalued, with 19% model upside, but its income record is weaker. Its 3.8% yield comes with a C safety grade, a 72% earnings payout and five-year dividend growth that declined 0.1% per year.

The riskier value cases are easy to identify. Companhia Paranaense de Energia (ELPC) yields 5.1%, has a D safety grade and pays out 102% of earnings, despite an undervalued verdict and 22% model upside. Algonquin Power & Utilities (AQN) yields 4.6%, carries a D grade and has a 108% earnings payout.

Growth separates the biggest payers

NextEra Energy (NEE), the sector's largest payer at $185.1 billion, yields 2.8% and grew its dividend 10.1% per year over five years. Its A safety grade and 44% earnings payout sit alongside the fastest stated growth rate among the largest payers in our data.

Southern (SO) and Duke Energy (DUK) offer higher current yields of 3.3% and 3.4%, respectively, but their five-year dividend growth rates are 2.9% and 2.0% per year. Both earn A safety grades, with earnings payouts of 72% for Southern and 64% for Duke.

Xcel Energy (XEL) and American Electric Power each grew dividends 5.8% per year. Xcel yields 2.9% with a 55% payout, while American Electric Power yields 3.1% with a 62% payout. Entergy (ETR) grew 5.2% per year and pays out 59% of earnings, but its 2.5% yield comes with an overvalued verdict.

The sector median of 5.6% annual dividend growth therefore conceals a wide split. Some of the biggest regulated electric companies combine A safety grades with growth near that median, while Southern and Duke deliver higher yields with slower growth.

How we did this

Figures cover U.S.-listed dividend-paying common stocks in Utilities worth $300 million or more. Safety grades from A to F and fair-value verdicts come from SmarterDividends models. Dividend actions are counted by ex-dividend date over the last six months. Fair-value verdicts are model estimates, not price targets.