In this article, we are going to discuss the 10 high yield utility stocks to buy in 2026.
The S&P Utilities index posted gains of 12.7% in 2025, driven primarily by the ballooning demand from data centers, as well as the rapid electrification of homes and businesses. According to the Energy Information Administration, the US electricity demand achieved its second straight record high in 2025 and is set to continue this momentum and reach new highs in 2026 and 2027 as well.
To keep up with the record-breaking demand, the US utilities sector broke a new record in CapEx spending for the fourth consecutive year in 2025, hitting about $250 billion, according to S&P Global. The firm expects this figure to rise even further in the current year. The high capital spending has also been supported by the long-term power purchase agreements that utility companies have signed with multiple hyperscalers, who want to make sure that they have enough energy available to keep up in the AI race.
The utility sector is also known for its commitment to shareholders. According to the latest data available at Janus Henderson, the sector paid $69.7 billion in dividends in 2023, up from $57.9 billion in 2022.
With that said, here are the Best Utility Dividend Stocks to Buy Now.
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Our Methodology
To collect data for this article, we observed various companies operating in the utilities sector and then shortlisted the ones with an annual dividend yield of over 3% as of January 27, 2026. We have also mentioned the number of hedge funds invested in the aforementioned stocks at the end of Q3 2025, as per the Insider Monkey database. The following are the Best Utility Dividend Stocks to Buy Now.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Exelon Corporation (NASDAQ:EXC)
Dividend Yield as of Jan. 27: 3.57%
Number of Hedge Fund Holders: 41
Exelon Corporation (NASDAQ:EXC) is one of the country’s largest utility companies, serving more than 10.7 million customers through six fully regulated transmission and distribution utilities.
On January 27, Wolfe Research downgraded Exelon Corporation (NASDAQ:EXC) from ‘Outperform’ to ‘Peer Perform’, without assigning the stock a price target. The analyst believes that EXC’s utility will be held back by the political and regulatory ‘noise’ in its key states, in addition to its below-average earnings growth of 5%-7%. Wolfe expects the utility’s 2026 guidance to be in line with forecasts.
Exelon Corporation (NASDAQ:EXC) received a setback also on January 22 when Barclays analyst Nicholas Campanella lowered the firm’s price target on the stock from $52 to $50, but maintained an ‘Overweight’ rating on the shares. The revised target, which still indicates an upside of over 11% from the current share price, comes as the analyst firm updated targets in the power and utilities group as part of a Q4 preview.
Similarly, earlier on January 20, Wells Fargo analyst Shahriar Pourreza also reduced the firm’s price target on Exelon Corporation (NASDAQ:EXC) from $52 to $51, while maintaining an ‘Overweight’ rating on the shares.
9. Duke Energy Corporation (NYSE:DUK)
Dividend Yield as of Jan. 27: 3.54%
Number of Hedge Fund Holders: 62
Duke Energy Corporation (NYSE:DUK) engages in the distribution of natural gas and energy-related services. The company owns and operates a diverse mix of regulated power plants – including hydro, coal, nuclear, natural gas, solar, and battery storage.
Duke Energy Corporation (NYSE:DUK) reiterated its commitment to shareholders by announcing a quarterly dividend of $1.065 per share on January 6. The dividend is payable on March 16 to all shareholders as of the February 13 record. The utility generates very stable cash flows backed by government-regulated rate structures, allowing it to pay distributions to its investors for 99 consecutive years. As of the writing of this piece, DUK boasts an annual dividend yield of 3.54%.
On January 23, RBC Capital analyst Stephen D’Ambrisi lowered the firm’s price target on Duke Energy Corporation (NYSE:DUK) from $143 to $140, but maintained a ‘Sector Perform’ rating on the shares. The revised target, which still indicates an upside of over 16% from the current levels, comes as part of the analyst firm’s broader research note previewing Q4 2025 earnings in the utilities sector.
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