In this article, we will take a look at the 10 Best Performing Utilities Stocks to Buy Now.
The global utilities industry is divided into three basic sectors: electricity, natural gas, and water. It is critical to the safe and sustainable generation, transmission, and distribution of these vital resources.
In the past, US electricity demand has averaged about 2% yearly, mirroring economic development. However, since 2000, as industrial power demand has dropped and energy efficiency has improved, this association has reduced. Consequently, since 2007, power demand has remained relatively stable.
That said, the industry may be poised for a renaissance owing to factors like the rise in data centers driven by AI developments and the widespread use of electric vehicles (EVs). In that regard, Morningstar predicts that demand will increase by 1% to 2% annually.
Speaking of AI data centers specifically, industry giants like Microsoft Corporation are making considerable progress given nuclear power’s capacity to meet the energy-intensive demands of AI applications while adhering to lower carbon footprint targets. In this context, Goldman Sachs predicts that by 2030, AI data centers’ electricity consumption will have more than doubled, accounting for 8% of overall consumption in the United States.
Pixabay/Public Domain
Our Methodology
For this list, we used stock screeners and identified utilities stocks that were popular among elite hedge funds and favored by analysts. We then checked their year-to-date performance and selected the 10 best-performing stocks from our initial pool. The names on this list appear in ascending order of their year-to-date performance, as of August 22.
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).
10. Enlight Renewable Energy Ltd. (NASDAQ:ENLT)
Year-To-Date Performance as of August 22: 56.97%
Number of Hedge Fund Holders: 2
Enlight Renewable Energy Ltd (NASDAQ:ENLT) ranks among the best performing utilities stocks to buy now. On August 7, Roth/MKM maintained its Buy rating on Enlight Renewable Energy Ltd. (NASDAQ:ENLT) and boosted its price target from $23 to $28. The hike comes after the renewable energy company released what Roth/MKM called a strong second-quarter report, coupled with upward adjustments to its 2025 projection and run-rate revenue expectations for the end of 2025 and 2026.
According to Roth/MKM, Enlight Renewable Energy Ltd. (NASDAQ:ENLT) has safely-harbored 6 GW of its portfolio, which is a major step toward its objective of attaining 6.5-8GW by the deadline of July 4, 2026.
Although the firm noted that a large portion of Enlight’s mature portfolio is expected to be completed before the end of 2027, it cautioned that there is still some risk associated with possible changes to safe harboring regulations.
Enlight Renewable Energy Ltd. (NASDAQ:ENLT) is an Israeli company that develops and manages solar and wind power projects. Back in 2021, the Israel-based company acquired Clēnera of Boise, Idaho, to expand into the US market.
9. Emera Inc. (NYSE:EMA)
Year-To-Date Performance as of August 22: 28.44%
Number of Hedge Fund Holders: 7
Emera Inc. (NYSE:EMA) ranks among the best performing utilities stocks to buy now. While retaining its Outperform rating, BMO Capital increased its price target for Emera Inc. (NYSE:EMA) from C$65 to C$68 on August 11. The update follows Emera’s Q2/25 results report, which BMO Capital stated supports the company’s growth expectations and balance sheet strength.
According to BMO, Emera’s Florida Electric utility is seeing “supernormal growth” of 39%, while credit indicators are steadily improving toward a target of 12%+ FFO/debt ratio.
Additionally, the firm cited positive regulatory outcomes for Emera Inc. (NYSE:EMA), which conducts about 95% of its business in regulated markets.
Emera Inc. (NYSE:EMA) is an energy and services company that primarily operates electricity and natural gas utilities, natural gas pipelines, energy marketing, and energy services firms.
8. Fortis Inc. (NYSE:FTS)
Year-To-Date Performance as of August 22: 21.91%
Number of Hedge Fund Holders: 13
Fortis Inc. (NYSE:FTS) ranks among the best performing utilities stocks to buy now. Wolfe Research kept its Underperform rating on Fortis Inc. (NYSE:FTS) and increased its price target from $45 to $46 on August 5. The price target hike comes after the energy company’s impressive year-to-date performance, with first-half 2025 earnings per share up C$0.16 from the same period the previous year.
In light of the company’s results, Wolfe Research has increased its 2025 earnings estimate by C$0.09 to C$3.52 per share. Additionally, the firm raised its 2026–2027 projections by C$0.02-0.03 each, citing a higher stock price.
Even so, Wolfe Research continues to consider Fortis’ premium valuation to be complete.
Fortis Inc. (NYSE:FTS) is a utility holding company that operates in the electricity and gas utility industries. It owns and operates electric utilities, which create, transmit, and distribute power to homeowners, businesses, and industrial clients.
7. Ormat Technologies, Inc. (NYSE:ORA)
Year-To-Date Performance as of August 22: 40.06%
Number of Hedge Fund Holders: 27
Ormat Technologies, Inc. (NYSE:ORA) ranks among the best performing utilities stocks to buy now. On August 19, Piper Sandler maintained its Neutral rating on Ormat Technologies, Inc. (NYSE:ORA) while increasing its price target to $90 from $78. The upgrade reflects an improved regulatory environment and the increasing demand for baseload power generation related to AI.
Piper Sandler cited a de-risked project pipeline as justification for altering the development company discount rate from 13.5% to 10% in its valuation model. The firm also raised its Product OpCo TTM EV/EBITDA multiple to 7x and its Electricity/Energy Storage multiple to 12.75x.
The firm further stated that legislative backing and the ongoing high demand from the artificial intelligence industry have caused Ormat’s EV/EBITDA for 2026 to double to 12.5x, reaching levels last seen in 2022.
Ormat Technologies, Inc. (NYSE:ORA) is a leading geothermal company that develops, produces, and offers sustainable energy solutions.
6. Oklo Inc. (NYSE:OKLO)
Year-To-Date Performance as of August 22: 231.51%
Number of Hedge Fund Holders: 36
Oklo Inc. (NYSE:OKLO) ranks among the best performing utilities stocks to buy now. UBS began coverage of Oklo Inc. (NYSE:OKLO) on August 20 with a Neutral rating and a $65 price target. The bank cited Oklo’s significant total addressable market (TAM) and profit potential of over $75 billion per year, with EBITDA margins around 70%, as favorable aspects supporting its value.
UBS weighed these advantages against a number of risk factors, such as the inherent hazards in developing nuclear projects and the early stage of small modular reactor (SMR) technology. The firm added that while it awaits more commercialization developments from Oklo Inc. (NYSE:OKLO), it remains “cautiously optimistic” about the possibility of a larger U.S. nuclear infrastructure build-out.
Oklo Inc. (NYSE:OKLO) is an advanced nuclear technology company that creates and builds nuclear fuel recycling systems and small fast reactors to deliver dependable, carbon-free electricity.
5. American Electric Power Company, Inc. (NASDAQ:AEP)
Year-To-Date Performance as of August 22: 23.63%
Number of Hedge Fund Holders: 53
American Electric Power Company, Inc. (NASDAQ:AEP) ranks among the best performing utilities stocks to buy now. Ladenburg Thalmann maintained its Neutral rating on American Electric Power Company, Inc. (NASDAQ:AEP) and boosted its price target from $109 to $112 on August 18.
The price target rise is in line with AEP’s larger capital expenditures, which were hinted at during the company’s earnings call for the second quarter. The firm raised its earnings per share projections for the utility based on this enlarged investment plan.
In an official statement, American Electric Power Company, Inc. (NASDAQ:AEP) stated that it anticipates raising its capital spending plan for 2025–2029 by $16 billion, to a total of $70 billion.
According to Ladenburg Thalmann, higher transmission spending in Texas accounts for about 45% of the $16 billion increase that is expected. Of the additional capital expenditure, 32% is attributable to higher generation spending in Oklahoma and Indiana.
American Electric Power Company, Inc. (NASDAQ:AEP), with its headquarters in Columbus, Ohio, provides dependable and reasonably priced power to 5.6 million consumers in 11 states.
4. NRG Energy Inc. (NYSE:NRG)
Year-To-Date Performance as of August 22: 77.11%
Number of Hedge Fund Holders: 73
NRG Energy, Inc. (NYSE:NRG) ranks among the best performing utilities stocks to buy now. On August 20, Melius Research began coverage of NRG Energy, Inc. (NYSE:NRG) with a price target of $308 and a Buy rating. The firm noted the integrated generation and retail strategy of NRG Energy, Inc. (NYSE:NRG), which provides 16 GW of generation capacity from assets such as coal, nuclear, solar, wind, and natural gas.
Melius also emphasized that NRG Energy, Inc. (NYSE:NRG) will soon acquire 18 natural gas-fired power facilities in nine U.S. states, which amounts to 13 GW of ECP’s generating capacity. The firm added that the power company’s energy portfolio is set to further expand with the acquisition of a top-tier commercial and industrial virtual power plant with a 6 GW capacity.
NRG Energy, Inc. (NYSE:NRG) is a fully integrated power company that produces electricity and provides retail energy services.
3. Constellation Energy Corporation (NASDAQ:CEG)
Year-To-Date Performance as of August 22: 38.64%
Number of Hedge Fund Holders: 79
Constellation Energy Corporation (NASDAQ:CEG) ranks among the best performing utilities stocks to buy now. On August 20, Melius Research began coverage of Constellation Energy Corporation (NASDAQ:CEG), assigning it a Buy rating and a $462 price target. The firm emphasized Constellation’s leading position in carbon-free power generation, namely its dominance in nuclear power production.
According to Melius, Constellation Energy Corporation (NASDAQ:CEG) generates around 10% of the electrical power in the US and serves three-quarters of Fortune 500 corporations, in addition to over 2 million residential users.
The firm also stated that Constellation Energy’s already substantial market presence will be further enhanced by its impending acquisition of Calpine.
Constellation Energy Corporation (NASDAQ:CEG) is a prominent energy company with a strong clean energy portfolio of over 33,000 megawatts, which includes nuclear, solar, wind, and hydroelectric power facilities. It works across five regions: the Mid-Atlantic, the Midwest, New York, ERCOT, and Other Power Regions.
2. Talen Energy Corporation (NASDAQ:TLN)
Year-To-Date Performance as of August 22: 76.76%
Number of Hedge Fund Holders: 83
Talen Energy Corporation (NASDAQ:TLN) ranks among the best performing utilities stocks to buy now. BofA Securities maintained its Buy rating on Talen Energy Corporation (NASDAQ:TLN) and raised its price target from $387 to $415 on August 12. The firm revised its earnings per share projections following marking-to-market power pricing to reflect a $329.17/MW-day capacity price for the forecast period.
In contrast to its earlier projections of $1,067 million, $2,020 million, and $2,038 million, respectively, BofA Securities now projects EBITDA of $1,060 million for fiscal year 2025, $1,974 million for fiscal year 2026, and $2,079 million for fiscal year 2027.
The firm also mentioned that instead of using an EBITDA multiple to determine its valuation, it now incorporates a discounted cash flow analysis of the official Susquehanna 17-year deal.
Based in Houston, Texas, Talen Energy Corporation (NASDAQ:TLN) is an independent power producer that operates approximately 10.7 gigawatts of generation assets spanning natural gas and nuclear facilities in the U.S.
1. Vistra Corp. (NYSE:VST)
Year-To-Date Performance as of August 22: 38.14%
Number of Hedge Fund Holders: 111
Vistra Corp. (NYSE:VST) ranks among the best performing utilities stocks to buy now. On August 20, Melius Research assumed coverage of Vistra Corp. (NYSE:VST) with a Buy rating and a $194 price target. The firm recognized Vistra as a significant player in the power markets, given its 41 GW of generating capacity from nuclear, natural gas, coal, and solar sources in addition to its battery storage capabilities.
Melius emphasized that Vistra Corp. (NYSE:VST) is the owner of one of the largest battery storage systems in the world, the Moss Landing energy storage complex in California. The firm also mentioned Vistra’s most recent deal, which saw the company announce that it had purchased seven natural gas plants from Lotus Infrastructure Partners.
Vistra Corp. (NYSE:VST) is a vertically integrated energy corporation with a wide range of businesses, including fuel manufacturing, wholesale energy sales, logistics, and power generating. The company supplies natural gas and electricity to its commercial, industrial, and residential clients.
While we acknowledge the potential of VST to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than VST and that has 100x upside potential, check out our report about this cheapest AI stock.
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