In this article, we are going to discuss the 11 best utility stocks to buy for dividends in 2026.

As of the writing of this piece, the S&P Utilities index has delivered gains of 7.32% since the beginning of 2026. This compares to a decline of 1.86% posted by the overall S&P 500 during the period.

The utilities sector is witnessing unprecedented load growth amid the ongoing AI boom. According to the Energy Information Administration, the electricity demand in the United States hit its second straight record high in 2025 and is set to continue this momentum and reach new highs in 2026 and 2027 as well. The primary reasons behind this surge are the sprawling data centers powering artificial intelligence and cryptocurrency, in addition to the general electrification of homes and businesses.

Keeping up with the soaring demand requires a significant amount of investment in energy generation and transmission infrastructure. As a result, the American 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 high demand and spending inevitably lead to higher prices for end consumers. Therefore, the US utilities requested a record-high $31 billion in rate hikes across the country last year, more than twice that of 2024.

Traditionally known as a safe-haven sector, many utilities operate under contracted or regulated pricing, offering predictable cash flows and often above-average dividends to investors. This makes them especially popular among retirement and income-focused investors, as well as those seeking more defensive holdings. According to the latest data available at Janus Henderson, the utilities sector paid $69.7 billion in dividends in 2023, up from $57.9 billion in 2022.

With that said, here are the Best Utility Stocks to Buy for Dividends.

Our Methodology

To collect data for this article, we referred to several stock screeners to find utility stocks with the most hedge fund investors in the Insider Monkey database as of the end of Q4 2025. Then we shortlisted the stocks that had an annual dividend yield of at least 3% as of March 7, 2026. The following are the Utility Dividend Stocks According to Hedge Funds. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.

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).

11. Northwest Natural Holding Company (NYSE:NWN)

Number of Hedge Fund Holders: 19

Dividend Yield as of March 7: 3.78%

Northwest Natural Holding Company (NYSE:NWN) operates natural gas distribution utilities serving the Pacific Northwest and Texas, as well as water and wastewater utilities serving customers across six states.

On March 5, Stifel raised its price target on Northwest Natural Holding Company (NYSE:NWN) from $52 to $58, while maintaining a ‘Buy’ rating on the shares. The revised target, which indicates an upside of over 11% from the current share price, comes following the utility’s Q4 results.

Northwest Natural Holding Company (NYSE:NWN) posted its Q4 2025 results on February 27, with the company’s adjusted earnings of $1.39 per share beating estimates by $0.03. However, the company’s revenue of just over $394 million fell short of expectations by almost $26 million, despite a 6% YoY growth.

Notably, Northwest Natural Holding Company (NYSE:NWN) delivered a record adjusted EPS of $2.93 for full-year 2025. Moreover, it deployed a record amount of capital to support customers and reported its strongest organic customer growth in nearly two decades for the year.

Northwest Natural Holding Company (NYSE:NWN) is targeting an EPS in the range of $2.95 to $3.15 for FY 2026, reaffirming its aim to grow its EPS at a CAGR of 4%-6% through 2030.

10. National Grid plc (NYSE:NGG)

Number of Hedge Fund Holders: 22

Dividend Yield as of March 7: 3.47%

National Grid plc (NYSE:NGG) engages in the transmission and distribution of electricity and gas. It operates through UK Electricity Transmission, UK Electricity Distribution, New England, New York, National Grid Ventures, and other segments.

National Grid plc (NYSE:NGG) received a boost on March 3 when Goldman Sachs increased its price target on the stock from £1,254 to £1,450, while keeping a ‘Buy’ rating on the shares. The updated target reflects an upside potential of over 7% from the current share price.

National Grid plc (NYSE:NGG) expects strong operational performance across the group in its full-year 2026, with underlying EPS expected to be in line with the 6-8% CAGR range from the 2024/25 baseline of 73.3p. Meanwhile, the overall group capital investment for continuing operations is expected to be over £11 billion in the ongoing year.

The share price of NGG has surged by over 14% since the beginning of 2026. With an impressive annual dividend yield of 3.47%, National Grid plc (NYSE:NGG) is included among the 15 Global Dividend Stocks to Diversify Your Portfolio.