Buy Utility Stocks – Invest in the Best Utility Stocks Today!

Fact Checked by Gary McFarlane

Utility Investing is a strategy that will allow you to maximize your profits throughout the long term by investing in companies that provide electricity, natural gas, water, sewage, and other services to both homes and businesses. Many of these companies are also regulated, which gives you added peace of mind when investing in them, as they feel the needs of just about anyone. 

This guide will dive deep and conduct an analysis of the best utility stocks that you can buy now, with the goal of showing you how to complete your goal of purchasing them through utilizing a 0% commission broker in less than a few minutes, so let’s dive in.

#1 Broker to Buy Utility Stocks – eToro

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How to Buy Utility Stocks – A Quick Guide For 2021

Suppose that you have a genuine interest when it comes to learning everything you need to know about buying utility stocks from the comfort of your home. If that is the cause, this guide will take you on a trip and show you everything you need to know about doing this task through the usage of eToro, which is an online brokerage fully regulated by SEC, FCA, and other financial bodies.

When you decide to use eToro, you will only be required to meet a $50 minimum investment amount when it comes to buying utility stocks, and this is a process that can be completed with ease. Best of all, you don’t have to pay any commission, so let’s dive in.

  • Step 1: Open an Account with eToro – You will first need to make an account with eToro through their official website and let them know who you are.
  • Step 2: Upload Your ID – You will be required to verify your account in order to use many of the features found at eToro and to do this, you will need to upload a copy of your government-issued I.D. and a proof of address issued within the prior three months.
  • Step 3: Deposit Funds – Once the account verification process has been completed from your end, you will then need to deposit some funds into eToro through a credit card, debit card, bank transfer, online banking, or even PayPal. Other e-wallets and local payment methods are supported too. The minimum deposit is just $50.
  • Step 4: Search for a Utility Stock – Typically, you will go to the search bar, after which you can search up the utility stocks you are interested in buying. All you have to do to invest is click on the “Trade Button.”
  • Step 5: Buy Utility Stocks – At the “Amount” box, all you will need to do is enter your stake, which is a minimum of $50 on eToro. They even support fractional investments, which means that you won’t need to buy a full stock. To confirm your utility stock investment, all you have to do is click on the “Open Trade” button.

Once all of this is completed, you will find the newly purchased utility stocks in your eToro portfolio. You can always check the value of these investments, and if the market goes up and you get a solid return, cash out at any time.

Best Utility Stocks to Buy Now – List of the Best Utility Stocks

If you’re searching for the best Utility stocks to buy right now – we like the look of the following companies.

  1. NRG Energy Inc. – Power-generating facilities in the U.S.
  2. UGI Corp. – Domestic and International Distributor of Energy Products and Services.
  3. Pinnacle West Capital Corp. – Utility holding Company.

We explain why the above five Utility stocks caught our attention throughout this article.

How to buy Utility Stocks – Choose a Broker

Suppose you want to buy utility stocks in the safest possible way. In that case, you need to ensure that the online brokerage you end up choosing has a high level of popularity, is fully regulated, and has been on the market for a prolonged period of time. You also need to consider the fees, the commission, the minimum investment requirements, and the supported payment methods. The customer support experience might also be an essential part of all of this.

We have found that the best utility stocks can be purchased from the brokers listed here in a safe as well as affordable way.

  • eToro – Overall Best Place to Buy Utility Stocks 
  • Capital.com – Trade Utility Stocks at 0% Commission

What are Utility Stocks? 

Utility stocks have a reputation for being the type of investment that will typically remain stable due to the fact that the demand for utility services remains steady even during a time of recession.

The rates they charge for these services need to be approved by a government entity or are contractually guaranteed. Due to that, they can generate reliable earnings that enable them to pay dividends with above-average yields.

This combination of predictable growth in terms of profitability as well as income generation makes them lower-risk options.

Due to this, they are recommended and ideal to be excellent options in regards to retirement income strategies.

Not all utility stocks out there will deliver competitive investment returns, and the best utilities will share additional characteristics that will help them outperform any competition.

Best Utility Stocks to Buy Now – Full Analysis

Before you start buying, you need to perform lots of research to find the best utility stocks for your portfolio. If you need a little help with this, we have reviewed some of the most attractive stocks in this marketplace.

NRG Energy Inc. – Power-generating facilities in the US

NRG Energy essentially owns and operates many power-generating facilities which are primarily located within the United States. That being the case, the company provides energy production, cogeneration facilities, and resource recovery services.

The main reason they are selected is due to the fact that for Q3, 2021, which ended on September 30, their net income rose more than six-fold. 

This growth can be attributed to their acquisition of Direct Energy as well as large movements in gas and power prices.

They have a 12-month trading P/E ratio of 3.7.

UGI Corp. – Domestic and International Distributor of Energy Products and Services

This is a domestic and international distributor of energy products and services that specialize in propane, natural gas, and electricity. Their net income for Q4 F.Y. 2021 ended on September 30 and was at $525 million, which is up from the $9 million in the prior-year quarter. Their total revenues climbed by 27.9%, and they reported a recorded net income ESP for F.Y. 2021, which the company attributed to their acquisition of Mountaineer Gas Company.

They have a 12-month trading P/E ratio of 6.5.

Pinnacle West Capital Corp. – Utility Holding Company

This is a utility holding company that offers retail and wholesale electric services throughout Arizona through a subsidiary. The company is also involved in real-estate development.

This makes it one of the better utility stock options out there, with a low 12-month trailing price-to-earnings (P/E) ratio. 

They have a 12-month trading P/E ratio of 13.3.

Investing vs. Trading Utility Stocks

There are many ways through which you can buy as well as sell utility stocks. This is, in most cases, a choice between a long-term buy-and-hold strategy or a short-term trading system.

When it comes to picking the right option, things can get tricky, and knowing what to pick is essential, so to make things easier for you, we’ve taken a deeper dive into everything you need to know about investing in utility stocks when compared to trading them.

Invest in Utility Stocks

If you are a newcomer to the world of online trading, then the best strategy you can deploy is the buy-and-hold investment strategy when you decide to buy utility stocks.

This will allow you to invest in the utility company through buying and owning the shares and also means that you will become a stakeholder in the company and, as such, be entitled to dividends if applicable. Due to the fact that you are a long-term investor, you will also need to keep hold of any utility stocks throughout a period of time of at least 12-months.

A period of more than five years is typically suggested due to the fact that this way, you can ride out any potential short-term market downfalls that might occur.

Trade Utility Stocks

Then we have trading, which is recommended for intermediate to advanced traders. This will involve you buying and selling traders on a short-term basis. What this means is that you will be on the constant lookout for opportunities, and these will essentially allow you to make a quick profit in the course of a couple of hours, days, or even weeks. One of the main ways to trade utility stock is by utilizing a low-cost broker that offers contracts-for-differences (CFDs).

This will allow you access as well as exposure to the stocks without taking full ownership over them, which means that you can apply leverage to your position. CFDs allow you to go long or short, and you can even look to enter positions to profit from rising and falling utility stock prices. This can be especially useful in any industry which has a high level of volatility.

How to Choose the Best Utility Stock for my Portfolio?

Knowing which utility stock to buy can be a difficult task. However, if you take into consideration a few things in your research, which we will outline below, you have the potential to pick the best utility stocks on the market.

One of the most important points that need to be taken into consideration is the financials. You need to pay close attention to the company’s balance sheet and discover how much debt the company actually has alongside its cash flow levels.

Suppose there is a wide disparity when it comes to these two figures specifically. In that case, this indicates that the firm might struggle to meet any short-term debt obligations and puts it in a critical condition.

That said, if it performs well, that’s excellent news for you.

Benefits of Utility Stocks

Utilities are companies that deliver essential services, such as water, gas, and electricity. This means that they are always in demand, no matter what kind of economic circumstances occur. This makes the sector one of the more stable areas of the stock market.

Utility stocks tend to hold up better in falling markets because people are typically in less of a rush to sell any lower-risk investments when the broader environment starts dropping.

An additional benefit is a fact that they often pay above-market dividends.

Drawbacks of Utility Stocks

The utility segment can be subject to broader market forces, and during the most recent market declines of the best decades, utility stocks have indeed lost half of their value on a price basis. However, this doesn’t count dividends. Keep that in mind when deciding between investing in bonds or dividend-paying stocks such as utilities.

Higher rates increase the interest burden of utilities due to the fact that companies in the sector tend to be capital-intensive.

Most of the time, the stock prices will drop when the interest rate climbs.

Where to buy Utility Stocks – Full Broker Reviews

Once you decide to buy utility stocks, the next step is for you to find a suitable broker that will facilitate your purchase and support the companies you want to invest in.

In this section, we’ll go over some of the best selections you have in terms of regulated brokers, which will allow you to buy utility stocks at a 0% commission.

1. eToro – Overall Best Place to buy Utility Stocks

eToro is a regulated online brokerage that has become the home to millions of investors and has been around for a long period of time. It is regulated by the SEC, FCA, ASIC as well as other reputable bodies. You can invest in utility stocks safely as a result of this.

You also have access to literally thousands of stocks throughout many international marketplaces, and this means you can buy and even sell a wide range of utility stocks.

Regardless of how much your chosen utility stock is actually trading at, all you really need to do is meet a minimum requirement in terms of investment at $50.

Furthermore, all stocks on eToro can be purchased at 0% commission, and eToro even offers you utility stocks ETFs.

Pros

  • 0% commissions
  • Minimal investment at $50
  • Supports deposits using debit cards, credit cards, and e-wallets
  • Used by millions
  • Regulated by SEC, FCA, ASIC, and more.
  • Social and Copy Trading Tools

Cons

  • Too basic for advanced traders
  • No support for MT4 or MT5

68% of retail investor accounts lose money when trading CFDs with this provider.

2. Capital.com – Trade Utility Stocks at 0% Commission

Capital.com allows you to buy utility stocks in the form of a CFD instrument. What this means is that you will not actually own the stock but will be trading them by specifying the market movements. This means that you can bet on the market going up in value or fall in value. In order to do this, all you really have to do is place a buy or a sell order. Once you have access to short-selling tools, you can achieve all of your goals with the proper time commitment and management. You can elect to short-cell on the Capital.com platform. Capital.com holds licenses with the FCA, CySEC, ASIC, and NBRB. When you open an account at Capital.com, the process itself is extremely streamlined and will take only a few minutes.

Pros

  • Top-rated spread betting and CFD broker
  • Licensed by FCA, ASIC, CySEC, and NBRB
  • $20 minimum deposit
  • 0% commission 
  • Convenient sign-up process
  • Thousands of financial markets are available

Cons

  • Experienced traders might consider it too basic
  • $250 minimum on bank transfers

68% of retail investor accounts lose money when trading CFDs with this provider.

How to buy Utility Stocks – Detailed & Explained in Full

If you are prepared to buy utility stocks right away, this section will walk you through the process of specifically completing this task through the usage of the eToro brokerage, so let’s dive in.

Step 1: Open a Broker Account

First, visit the official eToro website, after which you can click on the “Join Now” button of the page and follow any on-screen prompts.

Due to the fact that eToro is regulated, you will need to upload a copy of your government-issued I.D. as a part of the know-your-customer (KYC) procedure.

Step 2: Deposit Funds

Once you have successfully created your account, you will need to make your first deposit. The minimum deposit you can make is $50. There are no deposit fees if you are depositing using U.S. dollars, while other currencies have a fee of 0.5%.

Keep in mind that if you want to buy utility stocks at an instant, you can use a credit card, debit card, or e-wallet option such as PayPal.

Step 3: Search for Utility Stocks

Once you have successfully created your account and have completed the funding process, the next step you will need to make Is to go to the search box on the top of the page.

Here, you will need to enter the name of the unity stock you want to buy.

You can view a full list of utility stocks on offer by eToro by clicking on “Discover,” followed by “Stocks.”

Step 4: Buy Utility Stocks

In this last step, you will need to specify how much you actually want to invest in utility stocks. Keep in mind that you do not need to buy full shares at eToro, and you can invest any amount you would like, assuming it meets the criteria of the $50 minimum deposit.

Once you are ready to make your purchase, all that’s left for you to do is click on “Open Trade.” That’s all there is to buying utility.

How to Buy Utility Stocks – Conclusion

Utility stocks are a safe long-term investment that just about any beginner should get involved in. Utilities are always in demand, no matter in which direction the market swings and the companies listed here are some of the largest ones available which have seen a solid level of success.

With that in mind, if you want to buy utility stocks right away, now you know which companies to consider and which brokerage to pick. When using eToro, you only really need to cover a $50 minimum, and all stock investments are commission-free as well.

How to Buy Utility Stocks?

Where to Buy Utility Stocks?

What Are the Best Utility Stocks to Buy Right Now?

Should I Buy Utility Stocks?

How Much Do You Need to Buy Utility Stocks?

About Milko Trajcevski PRO INVESTOR

Milko Trajcevski is a truly determined content writer with a passion for the crypto industry and has a successful track record of researching and effectively writing articles about cryptocurrency, non-fungible tokens, and blockchain covering the fields of crypto-asset regulations, wallets and exchanges, liquidity, altcoins, DApps, forks, mining, laddering, security and enterprise blockchain technology.