11 Best Utility Stocks to Buy for Dividends in 2026

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1. The AES Corporation (NYSE:AES)

Number of Hedge Fund Holders: 56

Dividend Yield as of March 7: 4.97%

Topping our list of the Best Utility Stocks to Buy for Dividends is The AES Corporation (NYSE:AES). Together with its subsidiaries, AES operates as a power generation and utility company in the United States and internationally.

The AES Corporation (NYSE:AES) suffered a blow on March 6 when Morgan Stanley downgraded the stock from ‘Overweight’ to ‘Equal Weight’, while also trimming its price target from $23 to $15.

The downgrade comes after The AES Corporation (NYSE:AES) agreed to be acquired by a consortium led by BlackRock’s Global Infrastructure Partners and EQT Infrastructure earlier this month. The consortium will acquire AES for $15 per share, implying a total enterprise value of $33.4 billion. Meanwhile, Morgan Stanley had anticipated a potential transaction price in the low $20s per share and a total enterprise value around $38 billion. Moreover, AES is currently trading at almost 6% below the deal price, so investors do not expect another bidder to step in and make a competing offer for the utility.

While the $15 per share target represents the base case in which the current offer is approved, Morgan Stanley has another bull case of $18 per share for The AES Corporation (NYSE:AES) in case another bidder steps in to compete for the company.

While we acknowledge the potential of AES 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 AES and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 40 Most Popular Stocks Among Hedge Funds Heading into 2026 and 14 Best Oil and Gas Dividend Stocks to Buy Right Now.

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