As the war in Iran rages on, investors continue to look for safe havens beyond the oil and gas industry. Precious metals are typically a popular haven, but gold and silver are still in a drawdown following their unprecedented winter run-up. Bonds are another typical hiding spot, but rates have started rising again, which means prices are dropping. That leaves low-beta sectors like utilities, which often offer steady revenue streams and generous dividend yields. And that’s exactly where we’ll be looking for bargains today—the utility sector.
3 Utilities That Combine Income Generation and Capital Appreciation
Utilities are large and highly regulated, which caps upside potential but offers predictability and stability during volatile periods. That’s why we’ve sought out utilities that offer a little bit of both: income from dividends and potential capital appreciation, not just preservation. The three stocks selected here have strong dividends, consistent earnings growth, and low volatility, which is exactly what everyday investors need to weather a geopolitical shock.
NextEra Energy: Rare Combo of Utility Stability and Green Energy Upside
NextEra Energy Inc. (NYSE: NEE) combines a stable, income-generating industry with a fast-growing and potentially profitable one. NextEra operates Florida Power and Light, the largest regulated utility in the country, and NextEra Energy Resources, which owns the largest portfolio of wind and solar energy assets on the planet. Florida Power and Light serves more than 5 million customers, providing the company with a steady, state-regulated income stream to complement its renewable energy revenues. NextEra earned more than $27 billion in revenue in the last 12 months,
Renewable energy has been a volatile industry to invest in, and NextEra shares have the highest beta of any stock on this list at 0.75. But 0.75 is still 25% less volatile than the S&P 500, and the company’s dividend strength makes it worth the ups and downs. NextEra pays a 2.7% yield with a 75% dividend payout ratio (DPR), which is high but not alarming for a regulated utility. The company has also raised dividend payouts for 31 consecutive years, with 10% annualized growth over the last five years.
NEE trades at 25 times forward earnings, which is definitely on the pricey side for a utility. But remember, you’re paying for upside as well as income, and NEE shares appear to be gaining bullish momentum. The stock has consolidated into a bullish wedge pattern over the last few weeks, and now the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are showing signs of buying pressure.
Xcel Energy: Steady Earnings with a Strong Dividend
Xcel Energy Inc. (NASDAQ: XEL) is riding a few streaks that any public company would find impressive. Not only has the company raised its dividend payout for 22 consecutive years, but it’s also met or exceeded earnings-per-share (EPS) guidance for 21 straight years, a fact reaffirmed during its Q4 2025 earnings report released on Feb. 4.
Management announced fiscal 2026 EPS guidance of $4.18, a 9% increase from 2025. Steady earnings growth is the goal with an investment like XEL, and the stock trades at just 21 times forward earnings with a beta of 0.45. The stock also yields a 2.9% dividend with a 69% DPR (and only 26% of cash flow), the lowest of the three stocks selected here.
XEL shares recently touched down in oversold territory on the RSI, which has been an excellent place to buy over the last year. The last three times the RSI has dipped into oversold territory, the stock has reached the 200-day moving average before bouncing back into bullish territory. On the daily chart, the price has once again ricocheted off the 200-day moving average and recently retook the 50-day moving average. Buyers are back in control here, and the RSI suggests the rally has plenty of room to run to new highs.
WEC Energy: The Midwest Compounder With the Highest Yield
WEC Energy Group Inc. (NYSE: WEC) has been paying dividends since the early 1940s, and its current yield of 3.27% is the most lucrative of our picks. Its stock has also held up best during the Iran war, roughly flat in the last month, while the broader markets have tumbled. WEC serves nearly 5 million customers across Midwest states like Wisconsin, Minnesota, and Michigan, which are among the most favorable regions in the country for rate outcomes.
WEC has raised dividend payouts for 23 consecutive years, although the DPR is creeping up into warning territory at 78.8%. Dividend growth has been solid at 7% annualized over the last five years, including a 6.7% increase for fiscal 2026.
The stock has also bounced off its 50-day moving average following a Golden Cross, confirming that the overall uptrend remains intact. In fact, the bullish momentum could be accelerating now that the RSI has reached 50, a level generally considered the threshold at which buyers outnumber sellers.
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The article "3 Utility Stocks With Strong Dividends and Room to Run Higher" first appeared on MarketBeat.
