Two regulated utilities are quietly out-yielding the oil majors after a year in which energy stocks dominated the market. Duke Energy pays a 3.6 percent dividend yield and WEC Energy Group pays 3.5 percent as of September 2, according to Morningstar data, ahead of Chevron at 3.3 percent and Exxon Mobil and ConocoPhillips at 2.5 percent each.
The setup
The comparison matters because energy has been the market’s strongest sector. The Energy Select Sector SPDR ETF (XLE) has gained about 45 percent year to date, roughly triple the S&P 500’s 13 percent, while Brent crude trades above $95 per barrel amid Middle East conflict. Utilities have not kept pace on price. On income, they lead.
Duke Energy also ended its latest period with $850 million in cash, cash equivalents, and restricted cash, up from $442 million a year earlier, a cushion that supports the payout through rate cases and storm costs.
Key numbers
| Stock | Dividend yield | Morningstar fair value | Implied upside |
|---|---|---|---|
| Duke Energy (DUK) | 3.6 percent | $131 | About 9 percent |
| WEC Energy Group (WEC) | 3.5 percent | $116 | About 10 percent |
| Chevron (CVX) | 3.3 percent | Not rated in note | Not applicable |
| Exxon Mobil (XOM) | 2.5 percent | Not rated in note | Not applicable |
| ConocoPhillips (COP) | 2.5 percent | Not rated in note | Not applicable |
On a per-$100,000 basis, the gap compounds. A $100,000 Duke position yields about $3,600 per year at the current rate, and WEC generates roughly $3,500. The same dollars in Exxon Mobil or ConocoPhillips produce about $2,500.
Analyst outlook
Morningstar assigns Duke Energy a fair value estimate of $131, implying nearly 9 percent upside from its early September price, with a projected forward yield of 3.61 percent. The firm values WEC Energy Group at $116 per share, roughly 10 percent above recent trading, with a 3.59 percent forward yield and a narrow economic moat rating.
Morningstar counts both companies among the best dividend stocks in the market for 2026, citing regulated cash flows that do not swing with commodity prices. That steadiness is exactly what income investors give up when they chase the energy rally.
What to watch
- Interest rates: The 10-year Treasury yield has pushed toward 4.8 percent, its highest level since January 2025. High rates pressure utility valuations because dividends compete with bond income.
- Oil’s geopolitical premium: If Middle East tensions ease and crude retraces, the yield gap between utilities and oil majors could narrow from both directions.
- Rate cases and grid spending: Both companies earn through regulated rate base growth, so state approvals of transmission investment deserve attention.
Bottom line
For income-focused investors, the utility pair offers more cash per dollar invested today than every oil major except Chevron, with regulated revenue that does not depend on crude staying above $95. The trade-off is price participation, as XLE’s 45 percent run shows where momentum has been. A blend of regulated yield and energy exposure can serve both goals at once.
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