In this article, we will discuss: 12 Best Electric Utility Stocks to Buy Now.
Electric utility stocks are publicly listed companies that are overseen by government bodies. They generate revenue by supplying reliable energy to customers.
Morningstar energy and utilities strategists Travis Miller and Andrew Bischof find grounds to invest in utility stocks, stating that Utilities’ 2024 rally slowed in October as interest rates began to climb, but utilities stocks are still hanging on to their outstanding returns from the previous year. As of mid-February, the majority of US utilities are trading close to our estimates of their fair values.
Generally speaking, utility companies have high dividend yields and appear to be overpriced at the moment. According to Miller and Bischof:
“Utilities continue to grow their dividends at an impressive rate.” “Nearly all utilities have already announced dividend increases for 2025 or are on track to announce increases in the first quarter. We expect 5% median sectorwide dividend growth in 2025.”
Although they set their predictions below the mainstream, Miller and Bischof predict that the demand for electricity from data centers will almost double. They claim that the outlook for data center electricity demand is trending toward the bull-case scenario from their 10-year forecast in 2023. They stated:
“We remain below consensus forecasts as we believe several constraints—such as regulatory approvals, tight supply chains for equipment, and grid reliability during peak demand—will affect project timing and growth opportunities.”
The utilities sector, the worst-performing broader market group in 2023, recovered in 2024 as the power demand surged due to electrification, decarbonization, and artificial intelligence. The Energy Information Administration forecasts that global power consumption will climb by 75% by 2050, with data centers emerging as a main contributor.
Looking forward, according to Deloitte’s outlook, in 2025, the power and utilities sector will prioritize grid upgrading, nuclear expansion, distributed energy, workforce transformation, and carbon management. Secondly, increasing demand for electricity due to electrification and AI-powered data centers will force utilities to integrate clean energy sources and improve grid efficiency. Cost-sharing schemes and fair tariffs will be crucial. Partnerships and creative financial arrangements that solve waste and safety issues will hasten the implementation of nuclear power. Thirdly, distributed energy resources, such as virtual power plants and microgrids, will boost the efficiency and resilience of the system. Fourthly, utility companies will also make investments in workforce transformation, focusing on innovation-driven talent development, modular skills, and technology training to solve labor shortages. Lastly, notwithstanding technological and legal obstacles, utilities will increase carbon capture, storage, and offset programs in order to achieve decarbonization efforts. These tactics will assist utilities in striking a balance between cost-effectiveness, sustainability, and dependability in the face of rising electricity demand and changing energy regulations.
As per EY’s Power and Utilities Outlook 2025, the use of renewable energy and technology, as well as the modernization of infrastructure, present opportunities for utilities despite their high prices and growing demand.
With that said, here are the 12 Best Electric Utility Stocks to Buy Now.
A row of utility poles and power lines, showing the reach of the electric utility operations.
Our Methodology
We sifted through holdings of Electric Utility ETFs and online rankings to form an initial list of 30 Electric Utility stocks. From the resultant dataset, we chose the top 12 stocks most favoured by hedge funds, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s Revenue Growth Rate (year-over-year) as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Dominion Energy, Inc. (NYSE:D)
Number of Hedge Fund Investors: 39
One of the Best Utility Stocks, Dominion Energy, Inc. (NYSE:D) is an integrated energy firm headquartered in Richmond, Virginia, with over 90,000 miles of electric transmission and distribution lines and more than 30 gigawatts of electric generation capacity. It is building a 5.2 GW wind farm off the coast of Virginia Beach that will be rate-regulated.
Dominion Energy, Inc. (NYSE:D) reported non-GAAP operating earnings of $2.77 per share and GAAP net income of $2.44 per share for FY 2024. The original midpoint of $3.40 per share has been maintained, but the 2025 operating EPS range has been reduced to $3.28 to $3.52 per share. The capital expenditure plans of the firm have grown considerably, with a sizable amount going toward key industries, including distribution and transmission. Although increased capital investment indicates a favorable rate of base growth, the analyst thinks careful execution is also necessary to achieve desired returns.
Overall, Dominion Energy, Inc. (NYSE:D) remains focused on updating the electrical grid infrastructure, investing heavily in new transmission lines, energy storage systems, and substations to meet rising electricity demand.
Guggenheim maintained its Buy rating on the shares and boosted its price objective for Dominion Energy, Inc. (NYSE:D) from $66 to $69 per share. The analyst informs investors that the company believes tariff clarification would “go some ways towards lifting sentiment” in the near future, followed by gradual momentum around project milestones into the second half of the year.
11. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Investors: 42
Revenue growth (year-over-year): -8.43%
Public Service Enterprise Group Incorporated (NYSE:PEG) is a rate-regulated utility and one of the few utilities in the United States with a diverse business mix that includes wholesale nuclear generating. Even though nuclear power plants have received a lot of attention recently, the basic utility in New Jersey continues to generate the majority of revenues and growth.
It serves 4.3 million consumers in New Jersey with regulated gas and electricity delivery services. The Long Island Power Authority system is also run by the company.
Public Service Enterprise Group Incorporated (NYSE:PEG) has met or surpassed guidance for 20 years in a row with non-GAAP operating earnings of $0.84 per share for the fourth quarter of 2024 and $3.68 per share for the entire year. The business significantly boosted its energy efficiency efforts after it was approved for a $2.9 billion investment in its Clean Energy Future Energy Efficiency II program. It completed its advanced metering infrastructure program on schedule and within budget in 2024 as part of a $3.6 billion capital spending package.
According to J.D. Power’s poll, the organization ranked first in customer satisfaction and won the PA Consulting 2024 ReliabilityOne Award for the 23rd year in a row. In addition, Public Service Enterprise Group Incorporated (NYSE:PEG)’s annual common dividend was raised by $0.12 per share, which is the 14th consecutive increase announced by the Board of Directors.
10. FirstEnergy Corp. (NYSE:FE)
Number of Hedge Fund Investors: 42
Revenue growth (year-over-year): 4.74%
FirstEnergy Corp. (NYSE:FE) is among the Best Utility Stocks. It is a holding company owned by investors and is engaged in the production, distribution, and transmission of electrical power. In the Midwest and Mid-Atlantic, the company’s electric operating companies serve more than six million consumers while making up one of the biggest investor-owned electric systems in the country. Over 24,000 miles of transmission lines and two regional transmission operating centers are part of its transmission operations.
While core earnings shot up by 33% from 2022 to 2024, demonstrating the strength of its regulated activities, FirstEnergy Corp. (NYSE:FE) reported 2024 GAAP earnings of $1.70 per share and operating earnings of $2.63 per share, remaining within its target range. The firm secured a net yearly revenue gain of $450 million over the last 18 months, including a $225 million base rate case settlement in Pennsylvania, and successfully completed rate reviews in four of its five states.
FirstEnergy Corp. (NYSE:FE) announced that its Energize365 program will invest $28 billion through 2029, an 8% increase over the prior five-year plan, and that it has invested $4.5 billion in 2024, a rise of 5% over its initial target. Moreover, all of the company’s subsidiaries now have investment-grade ratings, and in 2024, it received 40 credit rating upgrades, more than twice the 2023 improvements seen across the whole U.S. electric utility sector.
9. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Investors: 44
An American utility company, Consolidated Edison, Inc. (NYSE:ED) offers regulated gas, steam, and electricity distribution services. The vast infrastructure that it manages includes distribution networks for natural gas and electricity as well as transmission lines, substations, and transformers. The company, which was founded in 1823 and has its headquarters in New York City, serves customers in the residential, commercial, industrial, and government sectors.
Despite regulatory obstacles in the past, Consolidated Edison, Inc. (NYSE:ED)’s primary rate-regulated natural gas and electric distribution utilities in New Jersey and New York have generated consistent dividend increases and earnings, making it one of the Best Utility Stocks to consider.
The revenue grew by 6.53% YoY in Q4 of 2024 and 4.04% in 2024. Overall, the financial performance for 2024 was primarily driven by the utility rate plans’ excellent implementation, which included continuous investment to maintain dependability and promote the clean energy transition. Greater pricing certainty for a significant amount of the projected 2025 equity funding needs is made possible by the successful completion of an equity forward transaction in the fourth quarter.
Andrew Weisel, a Scotiabank analyst, maintained a Sector Perform rating on Consolidated Edison, Inc. (NYSE:ED) shares and increased the price objective from $100 to $101. In a research note, the analyst informs investors that the company has shed the two main bear cases that have impacted shares over the previous few years: a difficult political and regulatory climate and below-average growth. The firm is greatly encouraged by the Orange and Rockland Utilities rate case in 2024, which was settled on significantly better-than-expected terms, even though the regulatory environment cannot be deemed completely clear until the highly publicized Consolidated Edison Company of New York rate case is concluded later this year.
8. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Investors: 47
Revenue growth (year-over-year): 3.89%
Electricity is generated, transmitted, and distributed by American Electric Power Company, Inc. (NASDAQ:AEP) for sale to both retail and wholesale consumers.
The company reported operating earnings of $1.24 per share in Q4 2024, reflecting a 7% increase from $5.25 per share in 2023 to $5.62 per share for the full year. Commercial load expansion drove strong growth, with a 12.3% rise in Q4 of 2024 and a 10.6% gain for the entire year, mostly due to rising demand for data centers.
American Electric Power Company, Inc. (NASDAQ:AEP)’s aim to decarbonize its fleet of generators is consistent with both industry-wide trends and government pressure to lower carbon emissions. It is anticipated that this strategic focus will assist the business in several ways. The company’s proactive decarbonization strategy is expected to end up in more favorable regulatory treatment and support for investment plans as states and the federal government fight for cleaner energy.
The company anticipates serving more than 20 gigawatts of new load by the end of the decade, with an annual growth rate of 8% to 9% for total retail load from 2025 to 2027. A five-year capital plan of American Electric Power Company, Inc. (NASDAQ:AEP) worth $54 billion keeps this possibility alive as it constructs infrastructure to meet the demands of its consumers, communities, and states. Furthermore, the firm is considering $10 billion in potential incremental investment across its service territory and regional transmission networks. As a result, it is projected that the company would see growth as it makes investments in transmission infrastructure and renewable projects, driven by the utilities sector’s expansion due to grid modernization and rising energy consumption.
7. Exelon Corporation (NASDAQ:EXC)
Number of Hedge Fund Investors: 47
Revenue growth (year-over-year): 5.99%
One of the Best Utility Stocks, Exelon Corporation (NASDAQ:EXC) operates six regulated utilities in Illinois, Pennsylvania, Maryland, New Jersey, Delaware, and Washington, D.C., serving over 10 million power and gas consumers. Exelon became a fully regulated utility following the sale of its merchant generation unit, offering income-seeking investors a more secure cash flow profile.
The Chicago-based electric utility company raised its capital investment plan by $38 billion over the course of four years to finance the additional transmission lines that would raise its total industry growth. The absence and deterioration of the current power lines, which raises the market’s demand for electricity, presents a growth potential for the business. Earlier this year, a number of the company’s rate cases were accepted by authorities and put into effect after taking the funds required into account. As of March 12, 2025, Exelon Corporation (NASDAQ:EXC) saw a positive growth of 15.24% YTD, making it one of the Best Utility Stocks.
The business reported adjusted operating earnings of $2.50 per share and 2024 GAAP earnings of $2.45 per share, achieving or surpassing projections for the third year in a row. Given its sound financial strategy and balance sheet, the company’s credit rating was upgraded from S&P to BBB+ by BBB. Over 80% of the $3.5 billion capital plan increase will come from Exelon Corporation (NASDAQ:EXC)’s projected $38 billion in investments between 2025 and 2028, with a concentration on transmission. Operationally, it maintained a top-quartile severe injury event rate, and all four of its utilities achieved top-quartile dependability, with some of them placing among the top five peers.
More than 70,000 jobs are expected to be created by Exelon Corporation (NASDAQ:EXC)’s initiatives, which have already drawn $17 billion in planned capital investments from other businesses, creating more than 1,000 jobs in Northern Illinois. It also raised its dividend to $1.60 per share, which is a 5.2% increase from the year before.
6. Entergy Corporation (NYSE:ETR)
Number of Hedge Fund Investors: 51
One of the Best Utility Stocks, Entergy Corporation (NYSE:ETR) is a holding company that generates and distributes energy to about 3 million people in Arkansas, Louisiana, Mississippi, and Texas through five regulated integrated utilities. Its rate-regulated owned and leased power-producing capacity of 24 gigawatts makes it one of the nation’s biggest power producers. It was the US’s second-largest nuclear owner before retiring and selling its Northeast nuclear power plants in 2014. In Louisiana, it intends to sell its two small gas utilities.
Entergy Corporation (NYSE:ETR) projects industrial sales to rise at a compound annual rate of 12% to 13% between 2024 and 2028 and announced a 2024 adjusted EPS of $3.65, placing it in the top end of its projection range. Sales in the industrial business grew by 15% in Q4 and 8% for the entire year, mostly due to the incorporation of two big hyperscale data centers into its outlook. Over the next four years, the firm intends to invest $37 billion, with a special focus on gas and renewable projects. The business also obtained important regulatory approvals, such as resilience investments in Louisiana, Texas, and New Orleans, as well as final settlements for SERI.
Following the Q4 results, BofA analyst Ross Fowler raised Entergy Corporation (NYSE:ETR)’s price objective from $82 to $88 on February 19. According to the analyst’s research note, Entergy provided an optimistic business update, including a raised earnings forecast, capital spending plan, and sales growth projection, which the firm believes supports the stock’s higher valuation.
5. The Southern Company (NYSE:SO)
Number of Hedge Fund Investors: 53
The Southern Company (NYSE:SO) is one of the largest utilities in the United States, making it one of the Best Utility Stocks. The company provides natural gas distribution utilities in four states and vertically integrated electric utilities in three states to its 9 million consumers. Its 50 gigawatts of rate-regulated producing capacity is mostly used to supply Georgia, Alabama, and Mississippi customers. It is a subsidiary that sells power mostly under long-term contracts and has 13 gigawatts of renewable energy and natural gas-producing facilities across the United States.
The Southern Company (NYSE:SO) reported significant earnings growth, with adjusted EPS at the top of its target range, growing 11% from 2023. The firm had substantial growth in both residential and commercial markets, adding 26,000 natural gas distribution customers and 57,000 new residential electric customers, while commercial sales surged 17% year over year. A substantial capital investment plan of $63 billion over the next five years was also revealed by it, of which 95% will go to state-regulated utilities. This is a $14 billion jump over the prior estimate.
Its southeastern area continues to see strong economic development, with more than 150 businesses growing their operations to support 20,000 new jobs and a possible 50,000 megawatt load increase by the mid-2030s. The company’s long-term perspective remains optimistic, as it reaffirms its estimated adjusted EPS growth rate of 5% to 7%, with possible performance falling close to the upper end of this range.
Mizuho raised the The Southern Company (NYSE:SO) price objective from $85 to $90. According to the analyst, the company’s updated expenditure strategy is likely to drive 7% rate-base growth, up from 6% previously. Although the company considers the update to be encouraging, it still believes the shares are valued reasonably.
4. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Investors: 62
Duke Energy Corporation (NYSE:DUK) is listed among our Best Utility Stocks. It is one of the country’s largest power company stocks. It has two business divisions. The first one is Electric utilities and infrastructure, which manages regulated utilities for 8.4 million retail electric consumers in North Carolina, South Carolina, Florida, Indiana, Ohio, and Kentucky. The second segment is Gas utilities and infrastructure, which distributes natural gas to 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio, and Kentucky.
Duke Energy Corporation (NYSE:DUK)’s utility portfolio, which is governed by government organizations that determine its rates, produces consistent revenue. As a result, it has steady cash flow to grow its utility companies and pay dividends.
The company outperforms numerous electricity stocks due to a few criteria. Its stable energy businesses that provide consistent revenue are complemented by a solid financial profile, which includes an investment-grade credit rating. Furthermore, it has a conservative dividend payout ratio, which allows it to make investments in cleaner energy. Duke Energy Corporation (NYSE:DUK) is making significant investments to improve its business practices and reduce its carbon footprint.
BMO Capital maintained its Outperform rating on Duke Energy Corporation (NYSE:DUK) shares and increased its price objective from $123 to $128. The firm reiterated its optimistic outlook on shares during its meeting with the company’s management team. The analyst informs investors in a research note that BMO continues to see a defensive profile and low-touch regulatory calendar with a visible growth inflection driving multiple expansions with continued execution.
3. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Investors: 74
PG&E Corporation (NYSE:PCG) is ranked third in our list of Best Utility Stocks. It is a holding firm whose primary subsidiary is Pacific Gas and Electric, a regulated utility in Central and Northern California that serves 5.3 million electricity customers and 4.6 million gas customers in 47 of the state’s 58 counties. It was supervised by the bankruptcy court from January 2019 until June 2020. In an earlier post-bankruptcy restructure, it sold its unregulated assets in 2004.
Since coming out of bankruptcy in 2019, PG&E Corporation (NYSE:PCG)’s financial status has improved dramatically. By upgrading its infrastructure, burying electricity lines, and installing cutting-edge weather monitoring systems, the company has significantly reduced the risk of wildfires. Additional defense against excessive financial liability is offered by California’s changing regulatory framework, which includes the state’s wildfire insurance fund. In 2024, it reported $1.36 in earnings per share, an 11% increase over 2023.
Operationally, PG&E Corporation (NYSE:PCG) keeps up steady earnings growth, bolstered by a robust regulatory framework and a substantial rate base expansion. The business’s long-term capital investment strategy is still in place, and its equity requirements are completely covered until 2028. In addition, its forward P/E ratio is still appealing when compared to rivals and its historical average, suggesting upside potential if market concerns fade.
Given that PG&E Corporation (NYSE:PCG) has no direct liability for the Palisade and Eaton fires, the company’s stock drop seems unjustified. Shares may rise sharply as investor confidence stabilizes and worries about wildfires subside, making a bullish case for sustained growth.
2. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Investors: 84
A renewable energy firm, NextEra Energy, Inc. (NYSE:NEE) is headquartered in Florida and produces, distributes, and sells electricity. It is one of the largest electric utilities in the country. The stock has shot up by almost 21% over the last 12 months, showing that it is producing solid returns and making it one of the Best Utility Stocks. The business mostly functions as a regulated utility, guaranteeing a steady and predictable flow of revenue. Although any planned capital improvements or rate changes need regulatory approval, the utility company in Florida maintains a monopoly within its service areas.
Long-term contracts and regulated rate structures provide steady cash flow for NextEra Energy, Inc. (NYSE:NEE)’s business segments, which supports a dividend that yielded more than 2.5% in mid-2024. Moreover, the firm typically has a dividend payout ratio that is lower than average, which gives it the financial flexibility to create more renewable power projects and invest in cleaner energy.
By 2027, management aims to boost its renewable energy capacity from 36 gigawatts to 46.5 gigawatts, which could double the business in the coming years. NextEra Energy, Inc. (NYSE:NEE) and GE Vernova have also signed a framework agreement to develop natural gas power production technologies that can handle several gigawatts for data centers and other industries.
1. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Investors: 85
The Maryland-based electricity supplier and the Best Utility Stock, Constellation Energy Corporation (NASDAQ:CEG) produces electricity using hydroelectric, wind, solar, nuclear, and natural gas. Ryan Levine, a Citi analyst, boosted the stock’s price objective from $284 to $334 on February 19. The share price rise comes after the company’s impressive Q4 of 2024 results, which showed that elevated electricity prices, nuclear output, and lower taxes helped EPS of $2.44 beat analyst projections of $1.96. However, Citi noticed a decline in wholesale sales and a shortfall in free cash flow as a result of working capital adjustments.
In Q4 of 2024, Constellation Energy Corporation (NASDAQ:CEG) exceeded profit projections because of a surge in electricity consumption and reduced expenses. The business made a daring step in January when it paid $16.4 billion to acquire Calpine Corp., one of the largest power industry transactions in the US. While operating expenses decreased by 23.6%, Q4 adjusted earnings came in at $2.44 per share, exceeding the $2.15 projection. It anticipates profits per share of $8.90 to $9.60 in 2025.
The company’s capacity to supply the power requirements of AI data centers is its main source of expansion. This is mostly due to its nuclear fleet, which generates 41 million megawatt-hours of clean energy at a 95% capacity factor. The business can refuel outages in less than 20 days. Constellation Energy Corporation (NASDAQ:CEG) is advocating initiatives that incentivize consumers to use less electricity during peak hours in an effort to address power shortages in the PJM area. PJM is the regional power grid operator for parts of 13 states and DC, ensuring consistent electricity flow.
Alger Mid Cap Focus Fund has been positive on Constellation Energy Corporation (NASDAQ:CEG) because of its leading position in clean nuclear energy. The company has strong growth potential driven by electrification and AI, along with favorable market conditions and agreements. The fund stated the following in its Q3 2024 investor letter:
“Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of clean energy in the U.S., with 32,400 Megawatts of capacity, 87% of which is nuclear generated. Its nuclear, hydro, wind, and solar facilities provide 10% of all clean energy on the U.S. grid and 22% of its clean baseload power. We believe the company stands to benefit from the increasing electrification of the U.S. economy. The rise of electric vehicles, data centers, and reshoring of American manufacturing is driving U.S. electricity load growth for the first time in nearly two decades. In our view, AI workloads are projected to significantly increase energy demand from data centers over the next few years. As American enterprises seek clean and reliable energy sources, nuclear power, which is carbon-free and dependable, stands out compared to intermittent renewables like wind and solar. Constellation, as an unregulated independent power producer, benefits from low fixed costs and can capture upside from rising electricity prices. We believe that potential opportunities for earnings growth include colocation (data centers near nuclear plants) and energy-matching programs with cloud providers willing to pay premium prices for nuclear energy. The Inflation Reduction Act also provides downside protection through a guaranteed minimum price for nuclear generation. During the quarter, shares contributed to performance from two events: 1) annual electricity auctions revealed tightening markets driven by increasing demand, driving higher pricing in the Middle Atlantic states, leading management to raise their fiscal 2024 earnings projections. 2) On September 20, 2024, Constellation Energy announced the signing of a 20-year power purchase agreement with Microsoft, which includes restarting Three Mile Island’s Unit 1 to supply energy.”
Overall, Constellation Energy Corporation (NASDAQ:CEG) ranks first on our list of the 12 Best Electric Utility Stocks to Buy Now. While we acknowledge the potential for CEG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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