In this article, we will be taking a look at the 11 most profitable utility stocks to buy according to hedge funds.
The US Energy Information Administration has increased its retail electricity sales projection, citing rising demand in the PJM and ERCOT (Texas) areas. The business sector has seen the largest increase, primarily due to the growth of data centers. It is anticipated that commercial electricity usage will increase by 3% in 2025 and 5% in 2026.
It also predicts that the United States will generate 1% more electricity this summer than it did in 2024. This is a result of increased electricity consumption in the commercial and industrial sectors. The EIA also predicts that higher natural gas prices this summer will lead to less generation from natural gas-fired power plants than last summer. This is anticipated to be mitigated by increased hydro, solar, and coal generation.
PwC reports that after a period of caution in late 2023, M&A activity in the power and utilities sector significantly increased in the previous 12 months. From May 2024 to May 2025, the total industry deal value was over $77.7 billion. This represents a substantial increase over 2023 ($43.3 billion) and 2024 ($29.6 billion) levels. The business plans to monitor the future effects of three major factors on the power and utilities M&A industry. Data centers’ increasing energy needs, modifications to federal energy laws, and an increased emphasis on grid stability and system resilience are some of these issues.
Amidst such trends, we will now have a look at the 11 Most Profitable 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
For our methodology, we began by using Finviz to screen for utility companies, sorting them by market capitalization in descending order to prioritize the largest firms. We then cross-referenced each company’s trailing twelve-month (TTM) net income using Yahoo Finance to assess profitability. Finally, we ranked the companies based on the number of hedge fund holders, as reported by Insider Monkey’s Q1 2025 data, to capture institutional investor interest. In cases where stocks had the same number of hedge fund holders, we used net income as a tiebreaker, ranking the company with the higher net income first.
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 11 most profitable utility stocks to buy according to hedge funds.
11. National Grid Plc (NYSE:NGG)
Number of Hedge Fund Holders: 18
National Grid Plc (NYSE:NGG) is a leading electricity and gas utility operating in the UK and the northeastern US and is among the most profitable stocks. It is accelerating its modernization and clean energy strategy in 2025 with a strong focus on artificial intelligence (AI) and smart infrastructure. The company aims to meet surging energy demands, improve reliability, and enable large-scale renewable integration.
Through its venture arm, National Grid Partners, the company has committed $100 million to AI startups developing grid-forecasting tools, AI-driven infrastructure maintenance, risk management systems, and digital twin technologies. Partnerships with firms like Amperon, AiDASH, and Sensat are already delivering results, including a 30% reduction in outages in parts of its US network via AI-based hazard detection.
Major grid modernization projects are underway on both sides of the Atlantic. In the UK, the Great Grid Upgrade—17 large infrastructure projects will expand clean energy capacity, particularly offshore wind, and are expected to support over 55,000 jobs by 2030. In the US, the Smart Path Connect transmission upgrade in New York is on track for completion by December 2025, enhancing renewable integration and reliability for 2.3 million customers.
National Grid Plc (NYSE:NGG) invested nearly £10 billion in 2025 across its UK and US operations, with a five-year plan to spend £60 billion primarily on grid upgrades, renewable connections, and digital transformation.
10. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Holders: 41
Public Service Enterprise Group Incorporated (NYSE:PEG), New Jersey’s largest electric and gas utility, is leveraging its 3,758 MW nuclear portfolio to meet rising demand from the region’s fast-growing data center sector. In Q2 2025, large-load interconnection requests, almost entirely from data centers, surged 47% in one quarter, reaching 9.4 GW. While only 10%–20% of these projects are expected to be realized, they represent substantial long-term demand for carbon-free, reliable power, strengthening the case for nuclear plant investment and upgrades.
To support this demand, Public Service Enterprise Group Incorporated (NYSE:PEG) is enhancing its nuclear operations, including a major refueling and upgrade at the Hope Creek plant to extend fuel cycles and improve flexibility. These initiatives align with New Jersey’s clean energy targets while positioning PSEG as a key supplier for hyperscale data centers seeking long-term, low-carbon energy contracts.
Public Service Enterprise Group Incorporated (NYSE:PEG) is also advancing grid modernization and clean energy programs, reaffirming $21–24 billion in capital spending through 2029. Its energy efficiency programs have already generated $720 million in annual customer savings and $740 million in rebates.
9. Dominion Energy, Inc. (NYSE:D)
Number of Hedge Fund Holders: 46
Dominion Energy, Inc. (NYSE:D), a major regulated utility based in Richmond, Virginia, serves over 3.6 million electricity customers in Virginia, North Carolina, and South Carolina, and 500,000 natural gas customers in South Carolina. The company is heavily investing in clean energy, with a focus on offshore wind and grid modernization.
Its flagship Coastal Virginia Offshore Wind Project, one of the largest in the U.S., is about 60% complete and on track for operation by late 2026. Although minor delays occurred due to issues with the installation vessel Charybdis, turbine installation continues at pace. The project’s budget has risen to $10.9 billion, partly due to material tariffs, but a contingency reserve remains. This initiative is central to the company’s decarbonization strategy and grid resilience goals, making it one of the most profitable stocks in the regulated utility sector to watch.
Dominion Energy, Inc. (NYSE:D) posted strong Q2 2025 results, beating earnings expectations with operating EPS of $0.75, reaffirming its full-year guidance.
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