Screen the sector priced for its dividend, not its growth.
Utilities cover regulated electric, gas and water providers whose returns are set largely by regulators rather than the open market. Growth is deliberately modest and the appeal is the dividend, so screening here is about the durability of the payout — regulated rate-base growth and a manageable debt load — rather than chasing earnings surprises.
Illustrative — not investment advice.
| Ticker | Company | Sub-industry |
|---|---|---|
| NEE | NextEra Energy | Regulated electric utility & renewables |
| SO | Southern Company | Regulated electric & gas utility |
| DUK | Duke Energy | Regulated electric & gas utility |
| AEP | American Electric Power | Regulated electric utility |
| D | Dominion Energy | Regulated electric & gas utility |
| EXC | Exelon | Regulated electric utility |
| SRE | Sempra | Regulated electric & gas utility, LNG |
| PEG | Public Service Enterprise Group | Regulated electric & gas utility |
| ED | Consolidated Edison | Regulated electric & gas utility |
| XEL | Xcel Energy | Regulated electric & gas utility |
| WEC | WEC Energy Group | Regulated electric & gas utility |
| AWK | American Water Works | Regulated water utility |
A dependable, above-market dividend is the entire investment case for most utilities; yield is the first thing to screen for and the first thing to protect.
Utility earnings grow largely by expanding the infrastructure regulators allow them to earn a return on; rate-base growth is the closest thing the sector has to an earnings-growth metric.
A payout ratio too close to 100% of earnings leaves no cushion for a rate-case setback or unplanned capex, raising the risk of a future dividend cut.
Utilities carry structurally high debt to fund infrastructure, but a leverage ceiling still separates conservatively financed utilities from those one downgrade away from a costlier refinancing.
Rising electricity demand from data centres and vehicle electrification is expanding the rate base utilities can invest in, a rare growth tailwind for an otherwise slow-growing sector.
Utilities are shifting generation toward wind, solar and storage, often earning a regulated return on that capital just as they would on a traditional power plant.
As utilities ask regulators to approve larger capital budgets, rate cases are drawing more political attention, adding uncertainty to the pace of allowed rate-base growth.
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Add a sector filter, then stack valuation, quality, growth and income filters with ≥, ≤ and range operators to match your thesis.
Open any survivor for a DCF you control, then save it to a watchlist with a margin-of-safety target so each name carries an undervalued / fair / rich signal.
Screen for a sustainable dividend yield, steady regulated rate-base growth, a payout ratio with room to spare and manageable leverage. That favours utilities protecting their dividend over those stretching to fund growth.
Open any ticker in Lemma Analysis and the DCF is pre-filled from years of financials. Adjust growth, margins and WACC to see fair value and a bear/base/bull spread, then run a reverse DCF to see what the current price already assumes.
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Building and maintaining power plants, grids and pipelines requires enormous upfront capital, and regulators typically allow utilities to earn a return on that invested capital — so debt-funded infrastructure investment is a normal, expected part of the business model, not a red flag by itself.
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