For years, technology stocks have been the talk of Wall Street, with investors eagerly eyeing potential game-changing innovations like AI, virtual reality, and blockchain.
However, amidst this frenzy for growth, some fantastic opportunities in traditionally stable sectors have been overlooked.
In the utility sector, two standout businesses are undervalued. They offer compelling investment prospects that have gone unnoticed for at least a decade.
Picks for you
NextEra Energy (NYSE: NEE)
The leading electric utility stock, NextEra Energy (NYSE: NEE), faced a challenging year in 2023. Despite this, its operational performance remained strong, thanks to its focus on renewable energy.
Despite recent setbacks, the stock has a solid dividend yield of 3.2%.
Half of its 72 gigawatts of capacity comes from clean sources, positioning it well for potential government regulations on cleaner energy. NextEra plans to continue its renewable energy investments to add significant capacity by 2026.
NEE shares have steadily climbed by 22% over the past six months, showing a gradual but consistent recovery. On price charts, NEE stock consistently adds gains each day.
York Water (NASDAQ: YORW)
A small water utility stock, York Water (NASDAQ: YORW), with a $484 million market cap, has seen its share value decline 25% since 2023 due to rising Treasury yields and interest rates.
However, it is on a slow and steady road to recovery, aided by its status as a monopoly or duopoly in its service areas, and ensures stable cash flow.
In addition, the company’s regulated status ensures predictable cash flow, recently boosted 18% by a rate hike approved by the Pennsylvania Public Utility Commission.
With a remarkable dividend history dating back to 1816, York Water has outperformed the S&P 500, offering an enticing investment opportunity.
Overall, these two stock picks might seem ‘boring’ at first glance, but they offer consistent returns over long periods, outperforming the stock market. Coupled with dividend payments, they hold a premium status for investors seeking security.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
