U.S. utilities for diversification, cash flow

Upgrades and cleaner generation pay off in profitability

We have some first-rate utility companies in Canada, such as Fortis Inc. (TSX: FTS), Hydro One Ltd. (TSX: H), Canadian Utilities Ltd. (TSX: CU), and Emera Inc. (TSX: EMA). But sometimes it’s worthwhile looking beyond our borders. American utilities offer diversification and dependable U.S. dollar cash flow. Some also provide exposure to the resurgent nuclear energy business.

Here are two U.S. utilities that we have recommended in my Income Investor newsletter. Prices are as of Nov. 14 and are in U.S. dollars.

The Southern Company powers profits from all-new nuclear

The Southern Company (NYSE: SO) is based in Atlanta, Georgia and was founded about a century ago. It supplies power to customers in Georgia, Alabama, Mississippi, and north Florida. Its facilities range from fossil fuel plants (mainly coal and natural gas) to clean energy and nuclear.

Its four Vogtie reactors, the last of which recently came on-line, comprise the largest generator of clean energy in the U.S., and are expected to produce more than 30 million megawatt hours of electricity each year. Southern was recently named by Newsweek’s “World’s Most Trusted Companies” list as the highest ranked U.S. energy company.

Southern’s third-quarter operating revenues were $7.8 billion, compared with $7.3 billion for the third quarter of 2024, an increase of 7.5%. For the nine months ended Sept. 30, 2025, operating revenues were $22.6 billion, compared with $20.4 billion for the corresponding period in 2024, an increase of 10.7%.

The company earned $1.8 billion ($1.60 per share) during the third quarter, compared with $1.6 billion ($1.43 per share) during the third quarter of 2024. For the nine months to Sept. 30, Southern earned $4.1 billion ($3.76 per share) compared with $3.9 billion ($3.56 per share) for the same period in 2024.

Southern operates the Alvin W. Vogtle Electric Generating Plant, located near Waynesboro, Georgia. It is one of the largest and most significant nuclear power facilities in the United States.

Vogtle originally began operation with Units 1 and 2 in the late 1980s, each generating around 1,100 megawatts of electricity. Together, they established Vogtle as a cornerstone of Georgia’s clean energy portfolio, providing reliable baseload power to millions of customers across the Southeast.

In 2009, construction began on Vogtle Units 3 and 4, the first new commercial nuclear reactors built in the US in over three decades. Both units use the advanced Westinghouse AP1000 pressurized water reactor design, featuring passive safety systems that can cool the reactor core without operator action or external power for extended periods.

After years of construction challenges, schedule delays, and cost overruns, Unit 3 began commercial operation in July 2023, and Unit 4 followed in April 2024. Together, they add more than 2,200 megawatts of carbon-free generation capacity, enough to power over one million homes and businesses. That makes Vogtle the largest producer of clean nuclear energy in the U.S.

Southern pays out US$2.96 (forward 12 months), for a yield of 3.3%. In late October, RBC Capital Markets resumed coverage of the stock, rating it as Sector Perform with a price target of $107.

Duke Energy undertakes ambitious transition

Duke Energy Corporation (NYSE: DUK) is based in Charlotte, North Carolina. The company’s electric utilities serve 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio, and Kentucky, and collectively own 55,100 megawatts of energy capacity. Its natural gas utilities serve 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio, and Kentucky.

The company is executing an ambitious energy transition, investing in major electric grid upgrades and cleaner generation, including natural gas, nuclear, renewables, and energy storage.

Duke recently released strong third-quarter results. Operating revenue for the three months to Sept. 30 was $8.5 billion, up from $8.2 billion in the same quarter of 2024. Net income applicable to shareholders was $1.4 billion ($1.81 per diluted share) compared to $1.3 billion ($1.60 per share) a year ago.

For the first nine months of the fiscal year, operating revenue was $24.3 billion, an increase of 5.7% from $23 billion in 2024. Net income was $3.8 billion ($4.81 per diluted share), compared with $3.2 billion ($4.16 a share) the year before.

The company narrowed its 2025 adjusted EPS guidance range to between $6.25 and $6.35. Long-term adjusted EPS growth rate is expected to be 5%-7% through 2029.

Duke pays out US$4.26 annually, for a yield of 3.5%. RBC Capital Markets has a target price of $143 for the stock.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.

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Notes and Disclaimer

Content © 2025 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

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