After a sector rally of nearly 30%, are there any high-yielding utility stocks left? (YES, and here are 3 of the best!)

Utility stocks have risen this year. As measured by Utilities Select Sector SPDR ETFaverage utility gained almost 30%. Add in dividends and the total return is well over 30%.

As utility stock prices have risen, their dividend yields have fallen. However, there are still some very attractive options if you know where to look. The Black Hills (BKH -0.07%), Brookfield Infrastructure (BIPC 1.23%) (BEEP 1.70%)and Brookfield Renewables (BEPC 0.98%) (BEP 1.49%) stand out to several Fool.com contributors right now as three of the best, higher-yielding options in the utility space. That makes them excellent options for those looking to generate dividend income.

The powerful little dividend utility

Reuben Gregg Brewer (Black Hills): The average utility, using the Utilities Select Sector SPDR ETF as an industry proxy, has a dividend yield of about 2.9%. Black Hills offers 4.25%. If you’re looking for high yield, you’ve found it right here. But that’s not the only thing to like about the Black Hills dividend. The regulated natural gas and electricity company has also raised its dividend for 54 consecutive years. You don’t build a track record like this by accident, which is why there are so few Dividend Kings like Black Hills in the utilities sector.

Don’t feel bad if you’ve never heard of the Black Hills. It is a relatively small company. With a market cap of about $4 billion, it’s not half the size of the smallest utility company in the S&P 500. But that’s a net benefit for small investors who know about the Black Hills (which now includes you). While everyone else is focusing on the industry giants, you can take the time to get to know a high-yield utility that is a “giant” when it comes to dividend consistency.

Supporting the dividend at Black Hills is a customer base that is growing about three times faster than the US population. And while earnings growth is targeted to fall between just 4% and 6% a year, the dividend likely to follow that number, it’s more than enough to not only keep up with inflation but also increase the purchasing power of dividend over time.

Sure, you’ll have to dig a little deeper if you want to pursue the Black Hills. But the additional yield and dividend consistency will probably be worth the effort.

A historically cheap valuation

Matt DiLallo (Brookfield Infrastructure): Brookfield Infrastructure has underperformed other utility stocks this year. Corporate shares ( BIPC ) rose 17%, while limited partnership units (BIP) gained only 8%. Because of that (and the company’s strong growth), it’s trading at a very compelling valuation these days, especially compared to other utilities.

The company is trading TO 14.1 times adjusted funds from operations (FFO). That’s below its all-time average of 15.5 and below the five-year average of 16.5. This low valuation is the reason for Brookfield Infrastructure at present offers such an attractive yield (4.8% for BIP and 3.9% for BIPC), more attractive than the average utility, which yields around 3% these days.

Brookfield also offers better dividend growth potential (5%-9% annually, compared to about 4% for other utilities). In the meantime, it offers a bigger degree of diversification (operates utilities and other utility-like businesses in the transportation, energy and data infrastructure sectors) with lower risk given its low exposure to consumers.

The company also has strong overall growth potential. It expects to grow its FFO at an annual rate of more than 10%. in the future. Its significant exposure to the digitization megatrend (more than 60% of FFO) is a great factor that fuels this vision.

Brookfield’s utilities and gas infrastructure assets should benefit from increased energy demand. Meanwhile, its utility-like data infrastructure platforms (semiconductor manufacturing, data centers, towers and fiber) will benefit from expected growth in computing power and data demand from megatrends like artificial intelligence (AI).

This is one of the most compelling investment opportunities in the utilities space these days. The company offers high growth potential and a high dividend yield at a historically low valuation. Because of this, it could produce strong total revenue in the coming years, making it a great one stock to buy right now.

Growth powered by renewable energy

Neha Chamaria (Brookfield Renewables): Climate change adds to the risk of energy security, one of the biggest reasons nations around the globe are embracing clean energy. Renewable energy sources such as wind, solar and water are readily available and abundant, with little or no greenhouse gas emissions.

Therefore, companies that generate electricity from renewable energy sources have a strong potential for growth. One such company is Brookfield Infrastructure’s renewable energy-focused sibling, Brookfield Renewable. The company offers 5.3% for partnership units and 4.5% for corporate shares.

Brookfield Renewable has a massive portfolio of hydro, wind and solar assets and huge utility-scale solar and wind development platforms with a presence in over 20 countries. As is typical of most utilities, Brookfield sold a large share, nearly 90 percent, of the renewable power it generated through long-term, fixed-price contracts with an average life of 13 years last year.

The company acquires renewable assets, operates them commercially with a focus on cash flow and dividend growth, and periodically retires some assets to fund growth. It plans to invest $8 billion to $9 billion over the next five years in growth opportunities with the goal of growing its annual FFO by more than 10 percent. Importantly, Brookfield is also targeting annual dividend growth of 5% to 9% during the period.

With Brookfield Renewable on track to deliver a record year, but the stock barely gaining 2% so far this year, it looks like one of the few dividend stocks you could actually double right now. Because its cash flows return dividends, investors can expect higher dividends year after year, which should further boost their total return on the stock over time.