Investors have been pushing utilities stocks higher in the first half of 2016, seeking less volatile stocks in the face of global uncertainty and seeking attractive dividends to combat record low interest rates. The Standard and Poor's (S&P) 500 utilities sector is up roughly 19% in 2016, making it the best-performing sector year to date (YTD), outperforming the broader market by approximately by 13%.

The following stocks are leaders in the utilities sector, offering healthy dividends, and are likely to continue outperforming the market in 2016.

Duke Energy

Duke Energy Corporation (NYSE: DUK) is the largest electric holding company in the United States. It supplies and delivers energy to roughly 7.4 million customers. Duke also has operations in Latin America, giving it exposure to an emerging market. In 2015, the company shed its power generation business, Dynegy Inc. (NYSE: DYN), and acquired Piedmont Natural Gas Co. Inc. (NYSE: PNY), foreseeing greater demand for the commodity. Depressed energy prices allowed for a discounted acquisition. Duke pays investors a 3.9% dividend yield; the company has issued a dividend for 89 consecutive years. Its three-year average revenue growth of 9.4% outperforms many of its peers, with an industry average of only 1.8%. Duke had returned 21.14% YTD in 2016 and had a market capitalization of $58.4 billion, as of July 27, 2016.

Exelon

Chicago-based Exelon Corporation (NYSE: EXC) distributes electricity to customers in Illinois and Pennsylvania, and distributes gas to customers in Philadelphia. It intends to invest $25 billion over the next five years to modernize its power grid. Utilizing the latest technology is likely to translate into greater efficiency. As of July 27, 2016, Exelon had a market cap of $35.2 billion and paid a healthy dividend yield of 3.4%. Although this is below the industry average of 3.7%, Exelon's payout ratio is only 55.3%, giving it ample room for dividend increases. The stock is trading at $36.59, which is only 2.56% below its 52-week high of $37.55. It had provided investors with a stellar 34.02% YTD return in 2016, strongly outperforming the industry average return of 16.62%.

Public Service Enterprise Group

Public Service Enterprise Group Inc. (NYSE: PEG) generates, distributes and transmits electricity and produces natural gas in the eastern United States. PSEG is cheaper than many of its competitors, with a price-earnings (P/E) ratio of 14.7, compared to an industry average of 19.8%. It has an attractive low debt-to-equity (D/E) ratio of 0.7. Investors holding the stock in 2016 have been handsomely rewarded with a YTD return of 18.82%. PSEG has a market cap of $22.8 billion and provides a dividend yield of 3.5%.

NextEra Energy

NextEra Energy Inc. (NYSE: NEE), founded in 1984, provides customers with sustainable energy generation and distribution services. It is the largest developer of renewable energy in the United States. Eighty percent of NextEra's business is shielded from competition, as it has noncompete deals with many municipalities. NextEra's dividend yield of 2.6% trails the industry average, but investors have been treated to 21 years of consecutive dividend increases. Additionally, it has compounded its payout at 8% annually between 2005 and 2015. As of July 27, 2016, the stock had returned an impressive 24.08% YTD, and had a $58.7 billion market cap.

Southern Company

Southern Company (NYSE: SO) is a public utility company that generates electricity for wholesale and retail customers in the southeastern United States, and supplies energy to 4.4 million customers. It agreed to purchase AGL Resources Inc. in 2015 to reduce its reliance on electricity and increase its customer base. Southern closed at $53.54 on July 27, 2016, only $1.10 below its 52-week high of $54.64, making it appealing for momentum investors. The stock had returned 16.78% YTD. The company's dividend payout has increased 180% between 1979 and 2015, equivalent to a 5% annual gain. Southern has a current dividend yield of 4.1%, eclipsing the industry average by 1%. The stock has a market cap of $49.2 billion.

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