6 Best Utility Stocks to Buy Now for Income

Over the three months preceding May 4, utilities were the second-best-performing sector in the S&P 500, rising more than 3% as the broader market fell about 7%. Investors are moving into these stocks as a defensive play amid worries about the economy. That leaves about three-fourths of U.S utilities overpriced, according to research firm Morningstar, even as higher inflation is poised to threaten profits. "The risk for utility stock investors is fairly high right now, and the investment options are limited," says Don Kaufman, co-founder of trading education firm TheoTrade. "That being said, the potential for the sector to outperform the market makes it a place to consider investing." As of May 3, all but one of these stocks were yielding more than the 10-year Treasury note. But dividends aren't everything, and sometimes it may be wise to pick a utility with a lower payout if it's a stronger company. Here's a look at six utilities stocks to put on your watch list.

American Electric Power Co. (AEP)
Duke Energy Corp. (DUK)
Consolidated Edison Inc. (ED)
Pinnacle West Capital Corp. (PNW)
UGI Corp. (UGI)
NextEra Energy Inc. (NEE)


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