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.
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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.
9. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 41
Dividend Yield as of March 7: 3.16%
Consolidated Edison, Inc. (NYSE:ED) operates one of the largest energy delivery systems in the world, providing electric, gas, and steam service to the 10 million people living in New York City and Westchester County.
On March 5, Evercore ISI upped its price target on Consolidated Edison, Inc. (NYSE:ED) from $106 to $117, while keeping an ‘In Line’ rating on the shares. The revision comes as the analyst firm adjusted its estimates on many companies in the power and utilities group following the Q4 earnings season.
Consolidated Edison, Inc. (NYSE:ED) exceeded estimates in both earnings and revenue in its Q4 2025 results posted on February 19. The company reported adjusted earnings of $5.70 per share for the full-year 2025, up from $5.40 a year earlier.
For FY 2026, Consolidated Edison, Inc. (NYSE:ED) expects its adjusted EPS to be in the range of $6.00 to $6.20 per share, compared to Wall Street estimates of $6.01. The utility is targeting a five-year adjusted EPS compound annual growth rate of 6% to 7%, using the midpoint of its 2026 guidance as a baseline.
8. FirstEnergy Corp. (NYSE:FE)
Number of Hedge Fund Holders: 41
Dividend Yield as of March 7: 3.66%
FirstEnergy Corp. (NYSE:FE)’s 10 electric distribution companies form one of America’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York.
FirstEnergy Corp. (NYSE:FE) announced on March 2 that it had been selected by the regional transmission grid operator PJM Interconnection to modernize equipment, rebuild older lines, and upgrade substations in Ohio and Pennsylvania. The utility is going to invest $950 million in the effort.
FirstEnergy Corp. (NYSE:FE) plans to invest approximately $490 million to build nearly 200 miles of new 765 kV lines to improve service reliability in the greater Columbus region in Ohio. It will spend another $294 billion in Ohio to build a new substation in Clark County, where two major power lines meet, and upgrade a line in the area.
Meanwhile, the utility is investing $165 million in Pennsylvania to rebuild an existing 115-kV line into a double circuit line in York and Adams counties, and to upgrade and tie in existing 500-kV lines in Armstrong and Indiana counties.
FirstEnergy Corp. (NYSE:FE) highlighted a 5-year capital investment program of $36 billion last month, designed to improve customer reliability and grid resiliency.
7. Exelon Corporation (NASDAQ:EXC)
Number of Hedge Fund Holders: 45
Dividend Yield as of March 7: 3.40%
Exelon Corporation (NASDAQ:EXC) is one of the country’s largest utility companies, serving more than 10 million customers through six fully regulated transmission and distribution utilities.
On March 5, Evercore ISI raised its price target on Exelon Corporation (NASDAQ:EXC) from $55 to $58, while maintaining its ‘Outperform’ rating on the shares. The updated target, which indicates an upside of over 17% from the current levels, comes as the firm revised its estimates on many power and utilities operators following the Q4 2025 earnings season.
Exelon Corporation (NASDAQ:EXC) exceeded earnings estimates in its Q4 results posted last month, helped by the higher electricity rates and rising power demand. The company is targeting an adjusted EPS in the range of $2.81-$2.91 in FY 2026, up from the $2.77 it achieved last year. The utility is projecting $41.3 billion of capital spending over the next four years, with aims to deliver annualized earnings growth near the top end of its 5%-7% guidance range through 2029.
Exelon Corporation (NASDAQ:EXC) boasts an impressive annual dividend yield of 3.40%, putting it among the 10 High Yield Utility Stocks to Buy in 2026.
6. Pinnacle West Capital Corporation (NYSE:PNW)
Number of Hedge Fund Holders: 45
Dividend Yield as of March 7: 3.55%
Pinnacle West Capital Corporation (NYSE:PNW) is an energy holding company that conducts business through its subsidiaries, Arizona Public Service Company, El Dorado Investment Company, and Pinnacle West Power.
On February 27, Barclays increased its price target on Pinnacle West Capital Corporation (NYSE:PNW) from $90 to $97, but maintained its ‘Equal Weight’ rating on the shares.
The update comes after Pinnacle West Capital Corporation (NYSE:PNW) reported its Q4 2025 results on February 25, with the utility posting earnings of $0.13 per share and beating estimates by $0.08. However, the company’s revenue of $1.13 billion fell below forecasts by around $40 million. PNW delivered earnings of $5.05 per share for the full-year 2025, landing in the upper half of its updated guidance range. Meanwhile, customer growth reached 2.4% during the year, also at the high end of guidance.
Pinnacle West Capital Corporation (NYSE:PNW) is targeting an EPS in the range of $4.55 to $4.75 for full-year 2026, while its long-term sales growth guidance remains at 5% to 7% through 2030.
5. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 47
Dividend Yield as of March 7: 4.89%
Edison International (NYSE:EIX) is one of the largest electric utility holding companies in America, focused on providing clean and reliable energy and energy services through its independent companies.
Edison International (NYSE:EIX) had a setback on March 5 when Ladenburg analyst Paul Fremont downgraded the stock from ‘Neutral’ to ‘Sell’, while also cutting its price target from $59.50 to $63. The revised target indicates a downside of around 17% from the current share price.
The downgrade is driven by the ‘anticipated true up’ of Southern California Edison’s earned returns versus authorized returns as part of the utility’s upcoming 2029 general rate case filing. The analyst cited 2024’s California Assembly Bill 2666, which requires the California Public Utilities Commission to adjust the authorized revenue requirement in subsequent rate cases based on actual past costs. According to Landenburg’s current estimates, Southern California Edison is expected to post consistent over-earnings.
Edison International (NYSE:EIX) posted core earnings per share of $6.55 in FY 2025. The company is now expecting a core EPS in the range of $5.90 to $6.20 for FY 2026, which it then expects to improve to $6.25 to $6.65 in FY 2027.
Edison International (NYSE:EIX) was also recently included in our list of the 11 Most Undervalued Utility Stocks to Buy Now.
4. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Holders: 49
Dividend Yield as of March 7: 3.22%
Next on our list of the Best Utility Dividend Stocks is Public Service Enterprise Group Incorporated (NYSE:PEG), a predominantly regulated energy company that engages in the provision of electric and gas services.
Public Service Enterprise Group Incorporated (NYSE:PEG) received a boost on March 5 when Evercore ISI upgraded the stock from ‘In Line’ to ‘Outperform’, while also increasing its price target from $83 to $96.
The upgrade is driven by a predominantly regulated earnings mix, constructive New Jersey regulatory frameworks, disciplined capital deployment, and embedded upside from nuclear optionality in a tightening PJM supply-demand environment. Moreover, it is reinforced by PSEG’s strong FY 2025 report, in which the utility delivered a 10% YoY growth in adjusted operating earnings to $4.05 per share.
Public Service Enterprise Group Incorporated (NYSE:PEG) reported its Q4 2025 results on February 26, with the company exceeding estimates in both earnings and revenue. The utility is targeting operating earnings in the range of $4.28 to $4.40 per share for FY 2026, up 7% from last year at the midpoint. PSEG also announced an updated capital program of $24 billion to $28 billion for 2026–2030, and raised its long-term adjusted earnings growth outlook to 6%-8% through the end of the decade.
3. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 51
Dividend Yield as of March 7: 3.22%
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) revealed on an SEC filing on March 6 that it had entered into an Equity Distribution Agreement with a group of financial institutions to establish an at-the-market equity distribution program. The company announced plans to sell up to $6 billion of its common stock, par value $0.001 per share, from time to time through the program. Duke also arranged the ability to enter into forward sale agreements with designated forward purchasers, giving it the flexibility to raise equity capital and manage issuance timing.
Duke Energy Corporation (NYSE:DUK) is targeting its adjusted earnings in the range of $6.55 to $6.80 per share for FY 2026, reaffirming its 5% to 7% long-term EPS growth rate through 2030. Moreover, the utility emphasized a $16 billion increase in its 5-year capital plan to $103 billion, with a continued focus on cost management, regulatory mechanisms, and customer affordability.
With an annual dividend yield of 3.22%, Duke Energy Corporation (NYSE:DUK) was recently included in our list of the 13 Best Defensive Dividend Stocks for 2026.
2. The Southern Company (NYSE:SO)
Number of Hedge Fund Holders: 54
Dividend Yield as of March 7: 3.04%
The Southern Company (NYSE:SO) is one of the largest producers of electricity in the United States and the largest wholesale provider in the Southeast. Together with its subsidiaries, the company delivers clean, safe, reliable, and affordable energy to its 9 million customers.
The Southern Company (NYSE:SO) received a lift on February 25 when the U.S. Department of Energy offered a $26.54 billion loan package to its subsidiaries, marking the largest ever such financing by the DoE’s Office of Energy Dominance Financing. The loans will have an approximately 30-year term and will help save power customers in Georgia and Alabama over $7 billion during this period.
The Southern Company (NYSE:SO)’s subsidiaries will be among the first to take advantage of the funding provided by President Trump’s Energy Dominance Financing Program under these new loans, which will be used to finance a portfolio of projects across the utility’s Southeastern service territory.
Chris Womack, Chairman, President, and CEO of The Southern Company (NYSE:SO), stated:
“These investments will support the extraordinary and transformative projected growth we’re seeing across our company. These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers. At Southern Company, we are focused on serving growth while maintaining rate stability and driving long-term savings for customers. We believe the actions we’re taking today will leave an enduring, positive impact on generations to come. We thank President Donald J. Trump and U.S. Department of Energy Secretary Chris Wright for their leadership and support of American energy infrastructure and the millions of customers we are privileged to serve.”
The Southern Company (NYSE:SO) announced last month that it had raised its capital investment plan to $81 billion over the next 5 years, up almost 18% from its guidance last year.
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.
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