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4 Low-Beta Utility Stocks to Buy Amid Record Low Consumer Confidence
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Key Takeaways
Consumer sentiment hit a record low in April as inflation surged and economic concerns deepened.
OGS, AWR, ATO and NI show earnings estimate revisions and a steady growth outlook.
Low beta and stable dividends make utility stocks attractive amid market volatility.
Soaring inflation and the ongoing conflict in the Middle East have raised concerns about the health of the nation’s economy, denting consumers’ sentiment. Hundreds of billions of dollars have already been spent in the ongoing war against Iran, which is taking a toll on the economy.
Inflation also climbed to its highest level in nearly a year, making it a challenging job for the Federal Reserve to decide its future monetary policy.
Given this scenario, we recommend buying five defensive stocks from the utility sectors, namely, ONE Gas, Inc. (OGS - Free Report) , American States Water Company (AWR - Free Report) , Atmos Energy Corporation (ATO - Free Report) and NiSource Inc. (NI - Free Report) .
Consumer sentiment dropped to a record low in April on fears of a shrinking economy. The University of Michigan’s survey showed that consumer sentiment plunged to 47.6 in April, declining 10.7% from March to hit its record low.
The short-term inflation expectation over the next year jumped to 4.8% in April, up 1% from the prior month to hit its highest level since August 2025. Higher energy costs owing to the ongoing crisis in the Middle East, along with high commodity prices, are making spending difficult.
The consumer sentiment reading came just days after fresh data showed inflation surging to its highest level in nearly a year. The Commerce Department reported last week that the Consumer Price Index (CPI) increased 0.9% in March compared to February, when it had risen 0.3%. This pushed the annual inflation rate up to 3.3%, marking its highest level since May 2024.
It is also the largest monthly gain since June 2022. The jump in inflation will now add pressure on the Federal Reserve, as inflation remains above the central bank’s 2% target. Rate cuts this year are now a distant dream, with the minutes of the Fed’s last FOMC meeting indicating that several policymakers are now inclined toward a rate hike. This could make the broader market volatile again.
4 Low-Beta Utility Stocks With Growth Potential
ONE Gas
ONE Gas is a 100% regulated natural gas distribution utility. OGS provides natural gas distribution services to more than 2.3 million customers in Oklahoma, Kansas and Texas.
ONE Gas has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. OGS has a Zacks Rank #2. The company has a beta of 0.75 and a current dividend yield of 3.07%.
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 60 days. AWR has a beta of 0.66 and a current dividend yield of 2.68%.
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy operates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 10.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. ATO has a beta of 0.69 and a current dividend yield of 2.15%.
NiSource Inc.
NiSource Inc., together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.
NiSource has an expected earnings growth rate of 7.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.61 and a current dividend yield of 2.53%.
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4 Low-Beta Utility Stocks to Buy Amid Record Low Consumer Confidence
Key Takeaways
Soaring inflation and the ongoing conflict in the Middle East have raised concerns about the health of the nation’s economy, denting consumers’ sentiment. Hundreds of billions of dollars have already been spent in the ongoing war against Iran, which is taking a toll on the economy.
Inflation also climbed to its highest level in nearly a year, making it a challenging job for the Federal Reserve to decide its future monetary policy.
Given this scenario, we recommend buying five defensive stocks from the utility sectors, namely, ONE Gas, Inc. (OGS - Free Report) , American States Water Company (AWR - Free Report) , Atmos Energy Corporation (ATO - Free Report) and NiSource Inc. (NI - Free Report) .
These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consumer Sentiment Declines
Consumer sentiment dropped to a record low in April on fears of a shrinking economy. The University of Michigan’s survey showed that consumer sentiment plunged to 47.6 in April, declining 10.7% from March to hit its record low.
The short-term inflation expectation over the next year jumped to 4.8% in April, up 1% from the prior month to hit its highest level since August 2025. Higher energy costs owing to the ongoing crisis in the Middle East, along with high commodity prices, are making spending difficult.
The consumer sentiment reading came just days after fresh data showed inflation surging to its highest level in nearly a year. The Commerce Department reported last week that the Consumer Price Index (CPI) increased 0.9% in March compared to February, when it had risen 0.3%. This pushed the annual inflation rate up to 3.3%, marking its highest level since May 2024.
It is also the largest monthly gain since June 2022. The jump in inflation will now add pressure on the Federal Reserve, as inflation remains above the central bank’s 2% target. Rate cuts this year are now a distant dream, with the minutes of the Fed’s last FOMC meeting indicating that several policymakers are now inclined toward a rate hike. This could make the broader market volatile again.
4 Low-Beta Utility Stocks With Growth Potential
ONE Gas
ONE Gas is a 100% regulated natural gas distribution utility. OGS provides natural gas distribution services to more than 2.3 million customers in Oklahoma, Kansas and Texas.
ONE Gas has an expected earnings growth rate of 5.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. OGS has a Zacks Rank #2. The company has a beta of 0.75 and a current dividend yield of 3.07%.
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 60 days. AWR has a beta of 0.66 and a current dividend yield of 2.68%.
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy operates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 10.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. ATO has a beta of 0.69 and a current dividend yield of 2.15%.
NiSource Inc.
NiSource Inc., together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.
NiSource has an expected earnings growth rate of 7.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.61 and a current dividend yield of 2.53%.