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.
8. Enel Chile S.A. (NYSE:ENIC)
Number of Hedge Fund Holdings: 10
Enel Chile S.A. (NYSE:ENIC), the country’s largest listed electricity utility, focuses on electricity generation, transmission, and distribution with a strong commitment to renewable energy and grid modernization. Operating under a regulated framework, the company ensures service reliability and maintains stakeholder confidence.
A key recent development is the leadership transition effective July 1, 2025. Former CEO Giuseppe Turchiarelli, who oversaw a 1.9 GW renewable energy build-out and accelerated decarbonization efforts since March 2024, stepped down to join Enel Group’s corporate strategy team in Rome. He is succeeded by Gianluca Palumbo, a veteran electrical engineer from Enel Group with deep expertise in grid operations and digitalization.
Palumbo’s appointment signals a strategic shift toward intensifying grid modernization and digital transformation, critical elements in Enel Chile S.A. (NYSE:ENIC)’s three-year plan. The company is expected to unveil a revised capital expenditure roadmap in August 2025, focusing on smart grid infrastructure to support Chile’s goal of reaching 93% renewable energy capacity by 2027.
Despite a July 2025 stock downgrade by Citi due to regulatory and sector uncertainties, Enel Chile S.A. (NYSE:ENIC) remains operationally resilient and continues to draw interest from investors seeking cheap utility stocks with long-term growth potential.
7. Pampa Energia S.A. (NYSE:PAM)
Number of Hedge Fund Holdings: 12
Pampa Energia S.A. (NYSE:PAM) is an integrated energy company in Argentina with operations in electricity generation, oil and gas production, and petrochemicals. It owns about 5,332 MW of installed power capacity and has grown its presence in renewable energy and natural gas production, especially through the Vaca Muerta shale formation.
In July 2025, the company submitted a $426 million proposal to build a major oil and gas processing plant in Neuquén province as part of a broader $1.5 billion expansion plan. This new facility, set to begin operations in 2026, includes a Central Processing Facility, pipelines, and storage terminals, all connected to Argentina’s existing oil and gas infrastructure. The goal is to increase production at the Rincon de Aranda field tenfold, with crude oil exports projected to generate $1.2 billion annually starting in 2027.
To support its growth, Pampa Energia S.A. (NYSE:PAM) recently issued $340 million in senior notes due in 2034, raising the total to $700 million. These funds will be used to redeem existing debt and finance strategic initiatives. Operationally, the business has posted strong results, with natural gas production growing 21% year-over-year and adjusted EBITDA rising 30% in Q2 2024. Wind energy capacity has also expanded by 50% since 2017.
6. Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG)
Number of Hedge Fund Holdings: 13
Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG), one of Brazil’s largest integrated energy utilities, is advancing a major modernization initiative in 2025 with a record investment of BRL 6.3 billion (approx. $6.3 billion). The program focuses on upgrading infrastructure, expanding renewable energy, and embracing digital transformation to strengthen the company’s role in Brazil’s evolving energy landscape.
Key components of this plan include the deployment of smart meters and Advanced Distribution Management Systems (ADMS) to improve grid efficiency and reliability. These technologies enable real-time monitoring and better control, essential for managing increasing renewable energy integration. Additionally, the company is enhancing grid resilience and decentralizing operations through six newly established regional units to improve customer responsiveness.
Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG) is also investing in digital platforms like SAP S4/HANA to boost operational transparency and service agility. These upgrades support the company’s broader goal of transitioning toward a more sustainable and technology-driven energy model. As one of the cheap utility stocks, the business is launching its first solar energy plants in July 2025, reinforcing its commitment to clean energy development.
5. Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR)
Number of Hedge Fund Holdings: 14
Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR), Latin America’s largest utility company, is undergoing a major transformation following its privatization. This shift has allowed the company to focus on disciplined management, expand infrastructure, and improve financial health. Key achievements include reducing mandatory loan provisions by 50% and announcing a record BRL 4 billion dividend payout, signaling stronger operational performance.
Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR) is investing BRL 14 billion in strategic projects such as the Transnorte Energia transmission line and the Coxilha Negra wind farm to meet Brazil’s rising energy demand. The company also hired over 2,100 new employees while reducing operational costs, reflecting an efficiency-focused restructuring effort.
A notable development in early 2025 was the corporation’s agreement with the Brazilian federal government to end a legal dispute over voting power, an outcome seen as a governance win that improves regulatory clarity. This adds stability to its post-privatization roadmap.
To support infrastructure expansion, Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR) secured a landmark US$600 million syndicated loan, led by CAF and Citi, marking its return to the international financing market. The loan will fund capacity expansions and network upgrades, reinforcing the company’s role in modernizing Brazil’s power sector.
4. Hawaiian Electric Industries, Inc. (NYSE:HE)
Number of Hedge Fund Holdings: 29
Hawaiian Electric Industries, Inc. (NYSE:HE), the primary energy provider for 95% of Hawaii’s population, is advancing its commitment to renewable energy and grid modernization while addressing wildfire safety. Operating across Oahu, Hawaii, Maui, Lanai, and Molokai, the company is focused on strengthening its core utility business and transitioning to a more resilient, sustainable energy system.
A major step in its clean energy transition is the Hoohana Solar project, which began operations in July 2025. This marks a significant milestone in expanding grid-scale renewable capacity and supports Hawaii’s decarbonization goals.
Hawaiian Electric Industries, Inc. (NYSE:HE) is also prioritizing wildfire safety, investing $120 million in 2024 to reduce wildfire risk by an estimated 60%. This includes installing fire-safe fuses, AI-assisted cameras, weather stations, and upgrading utility poles and overhead lines. The business launched a Public Safety Power Shutoff program and plans to submit a comprehensive wildfire safety plan to the Hawaii Public Utilities Commission in 2025.
Financially, the firm is strengthening its balance sheet by selling its stake in American Savings Bank to reduce debt and fund utility-focused initiatives, including wildfire mitigation efforts. As one of the cheap utility stocks, institutional investors like Allianz Asset Management and Bank of New York Mellon have recently increased their stakes in Hawaiian Electric Industries, Inc. (NYSE:HE), reflecting market confidence.
3. Edison International (NYSE:EIX)
Number of Hedge Fund Holdings: 44
Edison International (NYSE:EIX), through its utility arm Southern California Edison (SCE), is prioritizing wildfire mitigation, electrification, and grid modernization to align with California’s regulatory landscape and clean energy goals.
A key initiative is the Wildfire Recovery Compensation Program for victims of the Eaton Fire, launching in fall 2025. The voluntary program offers expedited compensation for structure loss, business disruption, injury, and related damages. The company has enlisted experts Kenneth Feinberg and Camille Biros to ensure fair, prompt resolution while investigations into the fire continue.
To bolster infrastructure resilience, Edison International (NYSE:EIX) is undergrounding 63 miles of distribution lines, assessing 19 more miles, and deploying advanced automation technology to improve outage management and grid reliability. These upgrades are essential for wildfire prevention and integrating renewable energy.
Legislatively, California Senate Bill 254—passed on June 4, 2025, could allow utilities to use securitization financing for wildfire mitigation and electrification projects. If finalized by September, this bill would help the business recover investments more efficiently. UBS has responded positively, maintaining a Buy rating and $70 price target, citing Edison’s leadership in electric vehicle (EV) deployment.
With the highest EV penetration among California utilities, Edison International (NYSE:EIX) is playing a vital role in the state’s clean transportation shift. Its investments in EV infrastructure and renewables integration underscore its strategic importance in advancing California’s sustainability agenda.
2. The AES Corporation (NYSE:AES)
Number of Hedge Fund Holdings: 52
The AES Corporation (NYSE:AES), a global power and utility company, is advancing its clean energy initiatives while exploring strategic options amid rising investor interest. The company operates internationally with a strong focus on renewables, including solar, wind, energy storage, and green hydrogen. Long-term power purchase agreements with major clients like Microsoft and Meta further strengthen its clean energy portfolio, with several large-scale projects in regions such as Texas and Kansas nearing completion in 2025.
The corporation is set to report its Q2 2025 earnings on July 31. Despite facing weather-related outages and increased restoration costs, the company benefits from growing energy demand driven by rapid data center expansion and favorable rate outcomes in previous quarters. These trends are expected to support continued revenue growth.
In early July 2025, The AES Corporation (NYSE:AES) shares rose over 9% following reports that the company is exploring a potential sale or other strategic alternatives. Interest from major firms like Brookfield Asset Management and Global Infrastructure Partners reflects the company’s appeal, particularly given its $40 billion enterprise value and recent stock decline. A possible leveraged buyout would be among the largest in the sector.
The AES Corporation (NYSE:AES)’s strategic direction is further underscored by its $4 billion joint venture with Air Products to develop green hydrogen in North Texas, aligning with decarbonization goals and new policy frameworks. The company views clean hydrogen as vital for reducing emissions in heavy-duty transport and industry.
1. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holdings: 76
PG&E Corporation (NYSE:PCG), serving about 16 million people across Northern and Central California, is advancing innovation and sustainability initiatives in 2025 and tops our list for being one of the cheap utility stocks. A key recent development is its $25 million Innovation Pitch Fest set for September in Oakland, inviting entrepreneurs and tech experts to propose scalable solutions for challenges like managing AI data center energy demands, neighborhood electrification, wildfire mitigation, and AI-driven safety enhancements. This reflects the company’s commitment to using cutting-edge technology to support California’s ambitious environmental goals.
PG&E Corporation (NYSE:PCG) also reported surpassing its 2025 target with a 42% reduction in methane emissions, demonstrating progress in environmental performance. Operationally, the business is optimizing its natural gas transmission capacity for October 2025 to improve efficiency.
Supporting its modernization efforts, PG&E Corporation (NYSE:PCG) secured a historic $15 billion loan from the Biden administration to fund climate initiatives and grid upgrades. This includes projects to increase hydroelectric dam capacity and develop “virtual power plants,” highlighting a broad strategy to modernize California’s energy infrastructure while promoting clean, reliable power.
While we acknowledge the potential of PCG 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 PCG and that has 100x upside potential, check out our report about this cheapest AI stock.
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