In this article, we will be taking a look at the 10 cheap utility stocks to buy according to hedge funds.
The US Energy Information Administration raised its forecast for retail electricity sales, highlighting growing demand in Texas (ERCOT) and PJM regions. The biggest increase is in the commercial sector, driven by expanding data centers. Commercial electricity consumption is projected to grow 3% in 2025 and by 5% in 2026.
Additionally, it projects that this summer’s electricity generation in the United States will rise by 1% over that of 2024. This is because the commercial and industrial sectors are using more power. Additionally, compared to last summer, the EIA anticipates that lower generation from natural gas-fired power plants will result from higher natural gas costs this summer. It is expected that increased coal, solar, and hydro generation will lessen this.
According to PwC, M&A activity in the power and utilities sector had a notable uptick in the preceding 12 months following a period of caution in late 2023. The overall industry deal value reached approximately $77.7 billion between May 2024 and May 2025. Compared to 2023 ($43.3 billion) and 2024 ($29.6 billion) levels, this indicates a significant increase. The company intends to keep an eye on how three key factors will continue to influence the power and utilities M&A market going forward. These factors include the rising energy requirements of data centers, changes in federal energy legislation, and heightened focus on system resilience and grid stability.
Amidst such trends, we will now have a look at the 10 Cheap Utility Stocks to Buy According to Hedge Funds.
High-voltage power lines. Electricity distribution station. high voltage electric transmission tower. Distribution electric substation with power lines and transformers.
Our Methodology
Our methodology involved filtering stocks with a market cap over $1 billion and a P/E ratio below 20 using a stock analysis filter. From these results, we selected the top 10 stocks with the lowest P/E ratios and then ranked them according to the number of hedge fund holders in Q1 2025, based on data from the Insider Monkey database.
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).
Here is our list of the 10 cheap utility stocks to buy according to hedge funds.
10. Central Puerto S.A. (NYSE:CEPU)
Number of Hedge Fund Holdings: 7
Central Puerto S.A. (NYSE:CEPU), one of Argentina’s top private power generation companies, stands tenth among the cheap utility stocks. It is expanding beyond traditional energy production into the mining and infrastructure sectors, with a focus on lithium, a key resource for electric vehicles and renewable energy storage. The company continues to grow its renewable and thermal energy assets while strategically entering the critical minerals space.
In 2025, Central Puerto S.A. (NYSE:CEPU) acquired a 27.5% stake in the high-grade Tres Cruces lithium project in Catamarca, Argentina, marking a major step in supporting the country’s lithium industry. It also increased its stake to 9.9% in AbraSilver Resource Corp., which holds gold, silver, and copper projects in Argentina, further diversifying Central Puerto’s resource exposure.
In collaboration with YPF Luz, the company is co-developing a large-scale transmission line in northwestern Argentina’s Puna region. This infrastructure will bring renewable power to mining operations and remote communities, with planned investments between $250 and $400 million. This move strengthens Argentina’s energy grid while supporting growth in the critical minerals sector.
Meanwhile, Central Puerto S.A. (NYSE:CEPU) is progressing on clean energy projects such as the San Carlos solar farm and enhancing thermal power reliability, reinforcing its commitment to Argentina’s energy transition.
9. Korea Electric Power Corporation (NYSE:KEP)
Number of Hedge Fund Holdings: 9
Korea Electric Power Corporation (NYSE:KEP) is South Korea’s largest electric utility, involved in power generation, transmission, and distribution using a diverse energy mix including nuclear, coal, gas, hydro, solar, and wind. It plays a central role in the country’s energy landscape and is expanding its presence in international markets.
One of Korea Electric Power Corporation (NYSE:KEP)’s most significant recent initiatives is the development of the world’s first superconducting power grid tailored for data centers. Announced in July 2025, this project is in partnership with LS Cable & System and LS Electric. The grid uses superconducting cables to transmit electricity with minimal resistance, reducing energy loss and cutting infrastructure costs. It’s designed to meet the surging energy needs of AI and data center operations while minimizing land use in urban areas. The business is handling technical and regulatory coordination, aiming to commercialize the technology both domestically and internationally.
Korea Electric Power Corporation (NYSE:KEP) is also advancing its renewable energy strategy, with plans to integrate 1 GW of offshore wind power into its grid, supporting South Korea’s broader energy transition goals. Additionally, the corporation is entering the nuclear decommissioning sector, managing the dismantling of the Kori-1 nuclear reactor over the next 12 years, a major step as the country begins retiring aging nuclear assets.
Amid climate-related disasters, KEP has engaged in community restoration efforts and contributed financial and material aid for recovery. These actions, along with government-backed electricity rate relief, reinforce its commitment to social responsibility.
