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.
8. Exelon Corporation (NASDAQ:EXC)
Number of Hedge Fund Holders: 48
Exelon Corporation (NASDAQ:EXC), a major U.S. energy provider, operates four key utility units, ComEd, PECO, BGE, and PHI, serving electricity transmission, distribution, and retail natural gas customers across multiple regions. The company focuses on operational excellence, grid modernization, customer affordability, and energy security.
In Q2 2025, Exelon Corporation (NASDAQ:EXC) reported adjusted operating earnings of $0.39 per share, slightly lower year-over-year but within guidance, despite severe storms that caused peak outages for over 325,000 PECO customers. Strong financial performance was supported by distribution and transmission rate increases and regulatory asset returns. The business reaffirmed its 2025 earnings outlook and its long-term goal of 5–7% annual EPS growth through 2028.
CEO Calvin Butler highlighted balanced investments, innovative customer solutions, and utility-owned generation as strategies to ensure resource adequacy and long-term reliability. Exelon Corporation (NASDAQ:EXC) also declared a $0.40 quarterly dividend, maintaining stable shareholder returns. Institutional interest has grown in 2025, with notable stakes from Invesco Ltd. and MUFG Securities.
The stock has shown strong momentum over the past year, outperforming both the S&P 500 and utility sector peers, underscoring investor confidence in the corporation’s steady growth and clean energy transition plans.
7. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 48
Sempra (NYSE:SRE), based in San Diego, operates regulated utilities in California and Texas along with infrastructure businesses in the U.S., Mexico, and abroad. The company is shifting toward a utility-focused model, prioritizing infrastructure investments and cleaner energy initiatives.
In Q2 2025, Sempra (NYSE:SRE) reported adjusted EPS of $0.89, flat year-over-year, and reaffirmed its full-year guidance, reflecting a focus on long-term growth over short-term fluctuations. Its Texas subsidiary, Oncor, saw a 40% jump in interconnections and added 20,000 new premises, driven largely by demand from data centers and other energy-intensive industries.
New regulatory mechanisms in Texas, like the Unified Tracker, are expected to improve cost recovery and boost returns, reinforcing its position among the most profitable stocks in the utility sector.
The company plans $13 billion in capital investments for 2025, with more than $5 billion already deployed in the first half, largely toward utility operations. Sempra (NYSE:SRE) is also selling non-core assets, including Mexican gas distributor Ecogas and part of Sempra Infrastructure Partners, to reallocate capital into higher-return regulated utilities.
Major infrastructure projects are advancing, including Cimarrón Wind, ECA LNG Phase 1, and Port Arthur LNG, alongside wildfire mitigation work, which has fully hardened San Diego Gas & Electric’s transmission systems in the highest fire-risk areas.
Sempra (NYSE:SRE) expects its rate base to grow from $57 billion in 2025 to $80 billion by 2029, with utilities driving most of that growth. Long-term adjusted EPS is projected to rise 7–9% annually through 2029, underscoring confidence in its strategy and positioning as a stable, utility-focused growth stock.
6. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 55
American Electric Power Company, Inc. (NASDAQ:AEP), one of the largest U.S. electric utilities, serves 5.6 million customers across 11 states and operates the nation’s largest transmission system with 40,000 miles of lines. It also has about 29,000 MW of generation capacity.
In Q2 2025, American Electric Power Company, Inc. (NASDAQ:AEP) reported record operating earnings of $1.43 per share, up from $1.25 a year earlier, and reaffirmed its 2025 guidance of $5.75–$5.95 per share along with a 6%–8% long-term growth target. The strong results reflect customer-focused execution, regulatory progress, and growing electricity demand.
The company plans $54 billion in capital investments from 2025 to 2029 to modernize the grid, enhance reliability, and integrate more renewable energy. This includes securing agreements for 24 GW of new load by decade’s end, up from the previous 21 GW target, driven by economic growth, electrification, and infrastructure expansion. Recent legislative and regulatory support in states like Oklahoma, Ohio, and Texas has facilitated new project approvals, including the Green Country natural gas plant acquisition.
5. The Southern Company (NYSE:SO)
Number of Hedge Fund Holders: 55
The Southern Company (NYSE:SO) stands fifth among the most profitable stocks. It is a leading U.S. utility based in Atlanta and serves over 9 million customers across the Southeast through its electric, natural gas, and energy solutions businesses. It operates eight nuclear units, including the newly completed Vogtle Units 3 and 4, the first new U.S. commercial nuclear units in roughly 30 years.
In Q2 2025, The Southern Company (NYSE:SO) increased its five-year base capital plan by $13 billion to $76 billion following approval of Georgia Power’s 2025 Integrated Resource Plan, which includes about 10 GW of new generation requests under review. The business also sees potential for up to $5 billion in additional capital investments through 2029, including gas pipeline expansions.
A major regulatory milestone is Georgia Power’s extended alternate rate plan, approved through early 2028, which removes the need for a 2025 base rate case and provides rate stability. This predictable environment supports large-scale investments while maintaining customer affordability.
The Southern Company (NYSE:SO) is also positioned to benefit from surging electricity demand, particularly from hyperscale data centers and industrial growth, with a pipeline exceeding 50 GW of potential new load. The corporation targets 5%–7% annual EPS growth through 2029, supported by disciplined capital deployment, regulatory certainty, and long-term customer contracts.
4. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 56
Duke Energy Corporation (NYSE:DUK), one of the largest U.S. electric utilities, serves 8.6 million electricity and 1.7 million natural gas customers across multiple states. With 55,100 MW of capacity, the company is focused on transitioning its energy mix toward natural gas, nuclear, renewables, and energy storage, while maintaining reliability and customer value.
In Q2 2025, Duke Energy Corporation (NYSE:DUK) reported nearly $1 billion in profits, driven by rate increases and strong commercial growth, including a $10 billion Amazon data center investment in North Carolina. The business is expanding natural gas generation with two major projects, a 1,360 MW combined-cycle plant in Person County and an 850 MW plant at Marshall Steam Station, both expected online by 2028.
Strategically, the corporation plans to merge its two North Carolina utilities, Duke Energy Carolinas and Duke Energy Progress, into a single entity by January 2027, pending approval. This consolidation aims to standardize rates across the region and is expected to save customers about $1 billion through 2038.
To fund its $87 billion five-year growth plan, Duke Energy Corporation (NYSE:DUK) sold a 19.7% stake in its Florida utility for $6 billion and agreed to sell its Piedmont Tennessee Natural Gas business for $2.48 billion, strengthening its financial position.
Additionally, the business is enhancing energy efficiency and demand response programs in South Carolina, increasing incentives to help customers reduce consumption and costs.
3. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 75
NextEra Energy, Inc. (NYSE:NEE), headquartered in Juno Beach, Florida, is a leading North American electric power and energy infrastructure company. It owns Florida Power & Light Company (FPL), serving about 12 million customers, and NextEra Energy Resources, a top U.S. renewable energy developer with a diverse portfolio including natural gas, nuclear, wind, solar, and battery storage.
In 2024 and early 2025, NextEra Energy, Inc. (NYSE:NEE) significantly expanded its renewable energy capacity, adding 8.7 gigawatts of new renewable and storage projects in 2024 and 3.2 gigawatts in Q1 2025. FPL also brought 894 megawatts of new solar capacity online, reinforcing the company’s clean energy momentum.
The business plans to invest approximately $120 billion over the next four years to grow its fleet to around 121 gigawatts, underscoring its long-term commitment to clean energy and infrastructure growth, and strengthening its case as one of the most profitable stocks in the sector.
Strategically, the corporation signed a framework agreement with GE Vernova to develop natural gas power generation solutions, broadening its energy mix to meet evolving customer needs and transition goals.
Alongside its renewable focus, NextEra Energy, Inc. (NYSE:NEE)’s regulated utility segment continues to provide reliable electricity and stable earnings, supporting its consistent dividend policy. The board recently declared a quarterly dividend of $0.5665 per share payable in September 2025 and expects to raise dividends by about 10% annually through at least 2026, reflecting strong financial health.
With a solid cash position of $1.8 billion in Q2 2025 and robust operating cash flow, the corporation is well-positioned for sustained growth and leadership in the clean energy transition.
2. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 83
Constellation Energy Corporation (NASDAQ:CEG), a Fortune 200 leader in emissions-free energy, delivers nearly 90% carbon-free power through nuclear, hydro, wind, and solar sources, serving businesses, homes, and public sectors nationwide. It powers the equivalent of 16 million homes, including three-fourths of Fortune 100 companies.
Recent highlights include a 20-year Power Purchase Agreement with Meta starting in 2027, covering the full output of the Clinton Clean Energy Center. This deal supports Meta’s clean energy goals and enables a 30-megawatt capacity expansion at the Clinton facility, which will provide low-cost, reliable power to the local grid for decades.
Constellation Energy Corporation (NASDAQ:CEG) is making major investments in Pennsylvania’s nuclear sector: the Crane Clean Energy Center is set to restart operations a year early in 2027 with 835 megawatts capacity; the company is seeking Nuclear Regulatory Commission approval to extend Peach Bottom Energy Center’s operations through 2054; and the Limerick Clean Energy Center plans life extension and a 340-megawatt capacity boost to operate through the 2040s, backed by customer commitments. These efforts aim to enhance grid reliability and foster innovation, including in AI.
The business also launched an AI-driven demand response tool to help businesses reduce energy consumption during peak periods, boosting grid efficiency and cutting costs.
In Q2 2025, Constellation Energy Corporation (NASDAQ:CEG) reported adjusted operating earnings of $1.91 per share, surpassing analyst expectations, fueled by rising electricity demand from AI, electric vehicles, and industrial growth.
1. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 102
Vistra Corp. (NYSE:VST) tops our list for being one of the most profitable stocks. It is a Texas-based leader in integrated retail electricity and power generation and operates the largest competitive power fleet in the U.S., spanning natural gas, nuclear, solar, and energy storage. The company is driving strategic growth and clean energy investments.
Vistra Corp. (NYSE:VST) targets a record adjusted EBITDA of $5.5–$6.1 billion and plans to boost natural gas capacity by 2,600 MW through an acquisition with Lotus Infrastructure Partners. The Nuclear Regulatory Commission granted a 20-year license extension for the company’s Perry Nuclear Plant in Ohio, securing a clean energy supply through 2046.
Construction is underway on new solar and energy storage projects, including the Newton Solar & Energy Storage Facility, reinforcing the business’s clean energy expansion. The corporation has also repurchased about 30% of its shares since 2021, demonstrating strong financial discipline.
Vistra Corp. (NYSE:VST) notes a surge in electricity demand reminiscent of the 1990s, driven by AI data centers and cryptocurrency mining, supporting forecasts for sustained higher consumption and profitability growth.
While we acknowledge the potential of VST 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 VST and that has 100x upside potential, check out our report about this cheapest AI stock.
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