3 Stable U.S. Utility Stocks for Dividends as Rates Stay Higher

With the Federal Reserve lifting rates again and signalling that higher borrowing costs could stick around into 2027, plenty of investors are rethinking where they want their money working for them. Defensive, dividend-paying U.S. utilities screened for stronger balance sheets and lower volatility can look especially interesting when growth feels harder to find. This piece walks through three such stocks influenced by that rate environment and explains why each one might deserve a closer look right now.

The three utilities covered below are only a small sample of what screened through that lens. The full filter surfaced 18 more dividend-paying U.S. utilities with similar balance sheet strength and income profiles that are not broken out in this article.

To identify and analyze those additional candidates for your own watchlist, head straight to the Defensive, Dividend-Paying U.S. Utilities screener.

Entergy (ETR)

Entergy is one of the clearest examples in this utilities screen of a large, regulated power provider whose earnings are closely tied to essential electricity demand rather than discretionary spending. This becomes especially relevant when borrowing costs stay higher for longer.

Entergy produces and distributes electricity across Arkansas, Louisiana, Mississippi and Texas, earning about US$13.4b from its utility operations and a small contribution from other activities. With a market value around US$47.1b it is a sizeable, dividend-focused player in this defensive utilities group.

"Substantial long term electricity demand growth from industrial development, population migration to the Gulf South, and large scale data center expansions in Entergy’s service territory now includes approximately 7 to 12 GW of hyperscale data center potential, 3 to 5 GW of traditional industrial demand, and signed agreements with AWS and Meta that together support the updated outlook for roughly 8.5% to 9% annual retail sales growth, which could lift regulated revenue and earnings over time."

What happens if one pressure point around how that future buildout is funded starts to squeeze returns just as that demand arrives?

That funding question is exactly what the full narrative for Entergy unpacks, explaining how Entergy could balance capital needs with accelerating demand as rate pressure and regulation continue to reshape the outlook.

Atmos Energy (ATO)

Atmos Energy fits the Defensive, Dividend-Paying U.S. Utilities theme as a regulated natural gas distributor. Its essential service and rate-based returns can help steady portfolios when higher-for-longer interest rates pressure more economically sensitive sectors.

Atmos Energy runs regulated natural gas distribution in eight states and a pipeline and storage network, with about US$4.6b of revenue from Distribution and US$1.2b from Pipeline and Storage. The stock has a market value of roughly US$26.6b.

"Strong customer and industrial load growth, including nearly 51,000 new customers over 12 months and 12 new industrial customers expected to use about 950,000 Mcf per year once fully operational, supports ongoing volume expansion that can lift Atmos Energy revenue and earnings power."

One key area for investor attention is how a single pressure point around funding that buildout could shift the balance between growing earnings and protecting margins.

If that funding balance is what you are watching, the full narrative for Atmos Energy shows how Atmos Energy’s growth push and margin risks could be decoupling beneath the surface.

Consolidated Edison (ED)

Consolidated Edison runs regulated electric, gas and steam networks serving New York City, Westchester and nearby regions, fitting the Defensive, Dividend-Paying U.S. Utilities theme as a large, regulated distributor. Most revenue comes from CECONY electric at about US$12.1b, CECONY gas at roughly US$3.4b and steam at around US$872 million, with a market value near US$38.1b.

Consolidated Edison offers investors a large, regulated utility with a long record of dividends, a P/E around 17.2x and a yield near 3.44%. These characteristics can appeal when rates stay elevated and growth slows, although everything depends on how one less visible funding pressure shapes future cash coverage and pricing power.

That cash coverage question is exactly where curious investors are focusing, and the 4 key rewards and 2 important warning signs (1 is major!) shows whether Consolidated Edison’s yield is masking something or reflects underappreciated potential.

Seeking Fresh Alternatives Before They Fly

Fresh ideas move first. The next breakout stories often gain momentum quietly while everyone is caught watching yesterday’s winners. Scan these under the radar for now picks and consider them carefully.

• Find resilient quality before it gets crowded by screening a curated 31 high quality undervalued stocks that still trade at prices many investors overlook.
• Explore the next leg of the AI trend by focusing on 87 AI infrastructure stocks powering data centers, chips and networking while it still flies under broad fund flows.
• Look for income that may keep paying even when markets wobble by zeroing in on a 8 dividend fortresses built around cash generation and balance sheet strength.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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