Utility stocks offer a safe haven when the stock market enters a downturn. Utilities tend to be less volatile than the broader market.
In addition, utility stocks pay dividends to shareholders and can raise them each year, even during recessions. This is because demand for utility services holds up well, even when the economy enters a downturn.
In this article, we will discuss 3 utility stocks that offer above-average dividend yields and safe payouts.
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3 Safe Utility Stocks with Excellent Yields
SJW Group (SJW)
SJW Group is a water utility company that produces, purchases, stores, purifies, and distributes water to consumers and businesses in the Silicon Valley area of California, the area north of San Antonio, Texas, Connecticut, and Maine. SJW Group also has a minor real estate division that owns and develops properties for residential and warehouse customers in California and Tennessee. The company generates about $750 million in annual revenues.
On January 29th, 2025, SJW Group announced that it was raising its quarterly dividend 5.0% to $0.42, extending its dividend growth streak to 57 consecutive years. SJW Group is a member of the Dividend Kings index. On February 27th, 2025, SJW Group announced fourth quarter and full-year results for the period ending December 31st, 2024. Revenue improved 15.5% for the quarter to $197.8 million, which topped expectations by $10.3 million.
Earnings per share of $0.74 compared favorably to earnings per share of $0.59 in the prior year, which was $0.19 ahead of estimates. For the year, revenue grew 12% to $748.4 million while earnings-per-share of $2.87 compared to $2.68 in 2023.
For the quarter, higher water rates added $22.8 million to results, higher customer usage added $9.9 million, and regulatory mechanisms lowered revenue totals by $7.1 million.
Earnings-per-share growth improved with a CAGR of 5% over the last 10 years, with the growth rate accelerating to 6.6% in the previous five years. We continue to forecast that the SJW Group will grow earnings at the average growth rate of 8.0% through 2030 due to revenue growth and rate increases.
SJW stock currently yields 3.1%.
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Black Hills Corp. (BKH)
Black Hills Corporation is an electric utility that provides electricity and natural gas to customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Black Hills was founded in 1941 and is headquartered in Rapid City, South Dakota.
Black Hills Corporation has increased its dividend for more than 50 years in a row, which makes it a Dividend King. According to Portfolio Insight’s Dividend Radar, the streak is 55 years.
Black Hills Corporation reported its fourth-quarter earnings results in February. The company generated revenues of $597 million during the quarter, which was 1% more than the revenues that Black Hills Corporation was able to generate during the previous year’s quarter. This was a reversal from the previous quarter when revenues had been down.
Black Hills Corporation generated earnings-per-share of $1.37 during the fourth quarter, above the consensus analyst estimate. Earnings-per-share were up by close to 20% versus the previous year’s quarter. Q4 and Q1 are seasonally stronger quarters due to higher natural gas demand for heating, which was again showcased by the above-average profitability during the fourth quarter.
Black Hills Corporation forecasts earnings-per-share of $4.00 to $4.20 for the current fiscal year. This would be a modest growth rate from 2024, allowing for another dividend increase this year.
Black Hills’ growth over the coming years depends on several factors. This includes rate reviews, which drive revenues and profits per kWh. Another factor is the expansion of the company’s existing assets via new utility infrastructure. Black Hills regularly adds new projects to its growth investment backlog. Black Hills’ planned growth investments include new electric transmission lines and natural gas pipelines to serve its customers.
Rate reviews will allow Black Hills to recover investments into its existing systems, thereby more or less guaranteeing increasing revenues over time as long as volumes on existing systems remain unchanged in the long run, which should lead to rising profits down the road.
BKH stock currently yields 4.5%.
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NextEra Energy (NEE)
NextEra Energy (NEE) is an electric utility with two operating segments, Florida Power & Light (“FPL”) and NextEra Energy Resources (“NEER”). FPL is the largest U.S. electric utility by retail megawatt hour sales and customer numbers. The rate-regulated electric utility serves about 5.9 million customer accounts in Florida. NEER is the largest generator of wind and solar energy in the world. NEE was founded in 1925. NEE generates roughly 80% of its revenues from FPL.
NextEra Energy reported its Q1 2025 financial results on 04/24/25. For the quarter, the company reported revenues of $6.3 billion (up 9.0% year over year), translating to adjusted earnings of $2.0 billion (up 8.8% year over year). On a per-share basis, adjusted earnings climbed 8.8% to $0.99.
The utility added ~3.2 GW of new renewables and storage projects to its backlog across ~0.2 GW of wind, ~2.0 GW of solar, ~0.9 GW of battery storage, and ~0.1 GW of re-powering, bringing its backlog to over ~27.7 GW.
The utility raised its quarterly dividend by 10% to $0.5665 per share. Management maintained its 2025 adjusted EPS guidance range at $3.45-$3.70.
Between 2015 and 2024, NextEra Energy grew its EPS by 9.5% a year. The company’s future growth will be generated through organic investments and acquisitions. For example, NEE acquired Gulf Power in January 2019, and it acquired GridLiance in Q1 2021 to expand its rate-regulated/long-term contracted business.
NEER commissioned ~8.7 GW of renewable and storage projects in 2024. At the end of 2024, its backlog stood at ~25 GW. Its renewable projects should drive the segment’s profits going forward. NEE forecasts its adjusted EPS will rise by about 6.9% annually through 2027.
As one of the biggest utilities in the United States, NEE also benefits from massive scale, which serves as a competitive advantage. Its focus on higher-growth renewable energy projects will allow NextEra Energy to continue growing faster than its peers.
NEE has increased its dividends for 31 consecutive years, making it a Dividend Champion and its shares currently yield 3.4%.
Disclosure: No positions in any stocks mentioned
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Bob Ciura
Bob Ciura is President of Content at Sure Dividend. Bob has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Prior to joining Sure Dividend, Bob was an independent equity analyst. Bob received a bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.