If you had to describe utility stocks, you would likely call them “boring”: cash-flow-heavy companies that generate ample dividend income. Words like “dynamic” and “growth” rarely come to mind. Yet today’s modern utility sector embodies both. Utilities embracing growth—such as our latest Best Dividend Capture Pick—offer investors the best of both worlds: powerful growth potential and high yield.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
As we said, our pick is a utility stock—but not just any utility. It ranks among the largest electricity providers in the United States, serving nearly six million customers across eleven states with enviable scale. This scale generates ample cash flows, lowers costs, and funds dividends and buybacks for shareholders. In fact, it has consistently raised its payout for the last 16 years!
Part of that growth stems from its massive CAPEX plan to expand power generation, increase its transmission network, and build out capabilities. The reason is data center growth. Our pick’s main operating footprint lies in America’s Midwest, where most new data centers are being built. With surging power needs, our pick stands to see earnings surge as demand rises. It has also used securitization of power agreements and loan guarantees to improve its capital stack for this build-out.
With growth and a long history of dividend increases, our pick excels as a dividend capture play. This strategy entails buying a stock before its ex-dividend date and selling after recovering the payout. With an ex-dividend date of Tuesday, February 10, and a historical recovery period averaging 6.8 days, our pick aligns well with the strategy.
For investors seeking total return from income and capital appreciation, our latest significant utility pick offers a lucrative option.
