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3 Undervalued Utilities for Dividend-Seekers

Dominion Energy, Duke Energy, and Southern Company are attractively priced and offer good total return prospects.

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Travis Miller: With the rise in interest rates in the last couple of months, the utilities sector is now open for stock-pickers. There are several utilities trading at 20% discounts, but all of them face challenges. We now think on the high-quality side there are three that offer good value for investors, especially those looking for dividends.

One of those is Dominion Energy. It trades at a 15% discount to our fair value estimate and a 4.5% yield. With good growth we think this is an attractive total return, especially with interest rates still low.

Travis Miller does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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