In this article, we will discuss 11 Most Undervalued Utility Stocks to Buy Now.
Undervalued utility stocks offer a compelling mix of defensive stability and attractive entry pricing in 2026. Utilities provide essential, recession-resistant services such as electricity, water, and natural gas, generating reliable and regulated cash flows that make them a traditional safe harbor during market volatility. Their reputation for stable, above-average dividend payments makes them particularly appealing for income-focused investors, especially in a declining interest rate environment where lower borrowing costs can enhance profitability and increase the relative attractiveness of dividend yields.
When these defensive characteristics are paired with low forward P/E ratios, the investment case becomes even stronger. A discounted forward multiple suggests investors are paying less for each dollar of expected future earnings, potentially signaling undervaluation relative to peers or broader market benchmarks. If a utility’s trailing P/E is higher than its forward P/E, it may indicate projected earnings growth, which means investors can gain exposure to improving fundamentals at a reasonable price. In many cases, subdued valuations reflect cautious expectations, which can create upside if companies exceed forecasts.
Importantly, utilities are no longer purely slow-growth income plays. In 2026, rising electrification and surging power demand from AI-driven data centers are creating incremental growth opportunities across the sector. This combination of defensive cash flows, dividend strength, structural demand tailwinds, and discounted valuations positions low P/E utility stocks as attractive value-oriented investments with both income stability and potential capital appreciation.
With this context in mind, here is a list of the 11 most undervalued utility stocks now.
Our Methodology
We used screeners to identify utility stocks that are trading below a forward P/E of 20, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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 Most Undervalued Utility Stocks to Buy Now
11. Sempra (NYSE:SRE)
Forward P/E: 17.40
On February 27, Wells Fargo raised the firm’s price target on Sempra (NYSE:SRE) to $113 from $112 and maintained an Overweight rating following the company’s earnings release. In the firm’s view, the latest print reinforces that Oncor represents the most valuable asset in the regulated utility sector, supported by an updated capital expenditure plan that now drives a projected 17% compound annual growth rate in rate base. Wells Fargo believes the moving pieces across Sempra’s portfolio — including transmission expansion, regulated infrastructure investment, and capital recycling — further strengthen its “best idea” Overweight thesis, underpinned by durable earnings visibility and above-peer rate base growth.
The day prior, Sempra (NYSE:SRE)’s board of directors declared a quarterly dividend of $0.6575 per share payable April 15 to shareholders of record at the close of business on March 19. The declaration increases the company’s annualized common dividend to $2.63 per share from $2.58 in 2025, reflecting continued dividend growth alongside its capital investment cycle.
Founded in 1998 and headquartered in San Diego, California, Sempra (NYSE:SRE) is a leading North American energy infrastructure company serving nearly 40 million consumers across the United States, Mexico, and global energy markets.
10. New Jersey Resources Corporation (NYSE:NJR)
Forward P/E: 15.92
On February 12, JPMorgan Chase raised its price target on New Jersey Resources Corporation (NYSE:NJR) to $56 from $52 and reiterated an Overweight rating.
During New Jersey Resources Corporation (NYSE:NJR)’s fiscal Q1 2026 earnings call, management set initial FY2026 NFEPS guidance at $3.03–$3.18 and subsequently increased it by $0.25 to $3.28–$3.43 following strong winter energy services performance — marking the sixth consecutive annual guidance raise. The outlook aligns with a 7%–9% long-term NFEPS growth target. NJR reaffirmed its five-year $4.8–$5.2 billion CapEx plan through FY2030 (~$5.0 billion midpoint), approximately 40% above the prior five-year period, with more than 60% allocated to New Jersey Natural Gas, expected to contribute roughly 70% of FY2026 NFEPS.
Additional growth drivers include Storage & Transportation earnings projected to more than double by 2027 and Leaf River working gas capacity expanding over 70% to 43 Bcf by 2028 (potentially 55 Bcf with a fourth cavern). Clean Energy Ventures continues scaling, targeting over 50% in-service capacity growth over two years. Balance sheet metrics remain solid, with adjusted FFO-to-debt projected near 20% over five years and no block equity issuance anticipated. Hedging and affordability programs further enhance earnings stability and customer retention.
Formed in 1981 and headquartered in Wall, New Jersey, New Jersey Resources Corporation (NYSE:NJR) provides natural gas distribution, transportation, storage, asset management, and clean energy services.
9. Portland General Electric Company (NYSE:POR)
Forward P/E: 15.10
On February 19, BMO Capital Markets analyst Edward DeArias raised the firm’s price target on Portland General Electric Company (NYSE:POR) to $55 from $53 and maintained a Market Perform rating. The $1.9 billion acquisition of PacifiCorp’s Washington utility assets is expected to provide modest valuation-year accretion and qualitative diversification benefits. However, BMO noted that the transaction further supports the justification for its holding company structure.
The same day, UBS raised its price target on Portland General Electric Company (NYSE:POR) to $55 from $53 and kept a Neutral rating.
On February 17, Portland General Electric Company (NYSE:POR) reported full-year 2025 GAAP net income of $306 million ($2.77 per diluted share) and non-GAAP net income of $336 million ($3.05 per diluted share), reflecting adjustments for transformation and optimization expenses. For 2026, PGE guided EPS of $3.33–$3.53 and weather-adjusted load growth of 2.5%–3.5%, while reaffirming long-term load growth of 3% through 2030 and 5%–7% long-term EPS and dividend growth. Year-end liquidity totaled $954 million, and 2025 CFO-to-debt exceeded 19%. The company anticipates a base equity need of $300 million in 2026, tapering to approximately $50 million in 2027, with total equity needs of roughly $350 million across 2026–2027 to fund 2023 RFP projects. An upsized $500 million ATM program and up to $350 million of debt issuance are expected in 2026.
Based in Portland, Oregon, Portland General Electric Company (NYSE:POR) generates, transmits, and distributes electricity serving nearly two-thirds of Oregon’s commercial and industrial activity.
8. Avista Corporation (NYSE:AVA)
Forward P/E: 14.20
On February 25, Avista Corporation (NYSE:AVA) raised its quarterly dividend to $0.4925 per share from $0.49, increasing the annual dividend to $1.97 per share. The company has increased its dividend for 24 consecutive years, delivering compound annual growth exceeding 5% and targeting a 60%–70% payout ratio.
That same day, Avista Corporation (NYSE:AVA) reported Q4 2025 results and issued 2026 non-GAAP utility EPS guidance of $2.52–$2.72 per diluted share. The outlook incorporates a one-time $0.12 headwind from a departing large customer and an estimated $0.10 negative midpoint impact from the energy recovery mechanism, which shares 90% of cost variances with customers. Management expects 2026 utility ROE in the low-to-mid 8% range and reiterated a longer-term ROE target of approximately 9% excluding ER impacts, with structural regulatory lag estimated at roughly 60 basis points. The company reaffirmed a 4%–6% long-term EPS CAGR target.
Avista Corporation (NYSE:AVA)’s CapEx totaled $553 million in 2025 and is projected at $585 million in 2026, with $3.4 billion planned from 2026–2030, representing approximately 5% base capital CAGR. An incremental potential of $350 million tied to the integration of a new large customer (125 MW initially ramping to 500 MW by 2030) could increase capital growth to roughly 12%. Funding plans include approximately $230 million of long-term debt and up to $90 million of common equity in 2026, alongside potential monetization of $148 million in nonregulated equity interests.
Founded in 1889 and headquartered in Spokane, Washington, Avista Corporation (NYSE:AVA) is among the most undervalued utility stocks to buy now. The company generates and transmits electricity and distributes natural gas to residential, commercial, and industrial customers.
7. Talen Energy Corporation (NASDAQ:TLN)
Forward P/E: 12.74
On February 20, Morgan Stanley raised the firm’s price target on Talen Energy Corporation (NASDAQ:TLN) to $474 from $473 and maintained an Overweight rating. Morgan Stanley notes that utilities underperformed the S&P’s return this month. Previewing Q4 earnings, the firm expects some balance in the discussion of data center pipelines given increased affordability and political concerns.
On February 26, Talen Energy Corporation (NASDAQ:TLN) announced FY2025 adjusted EBITDA of $1.035 billion and adjusted free cash flow of $524 million, exceeding the high end of the company’s revised guidance issued last quarter. Reaffirmed 2026 guidance of adjusted EBITDA between $1.75 billion and $2.05 billion and adjusted free cash flow between $980 million and $1.18 billion. At the midpoint, this implies approximately 84% EBITDA growth and roughly 106% adjusted free cash flow growth versus FY2025 results.
Moreover, management increased the share repurchase program to $2 billion through 2028 and highlighted high free cash flow conversion characteristics of acquired assets, with management focused on maximizing adjusted free cash flow per share.
Founded in 2015 and headquartered in Houston, Texas, Talen Energy Corporation (NASDAQ:TLN) is an independent power producer and energy infrastructure company. Talen owns, operates, and optimizes high-quality power infrastructure in the U.S. Its plants generate power using a variety of fuels, ranging from zero-carbon energy like nuclear to natural gas, coal, and oil.
6. Edison International (NYSE:EIX)
Forward P/E: 11.48
On February 26, Goldman Sachs raised the firm’s price target on Edison International (EIX) to $77 from $64 and maintained a Neutral rating on the shares. This quarter, Edison International extended its 5%-7% EPS compound annual growth rate target through 2030, enhancing long-term visibility underpinned by its capital plan and no incremental equity needs, though the outlook trails peers and is weighed by wildfire reform uncertainty and ongoing Eaton Fire litigation, the analyst tells investors in a research note. The inability to quantify potential fire-related losses remains an overhang, making progress on the SB 254 legislative process the key catalyst to de-risk the story and improve the long-term risk profile, the firm says.
Similarly, on February 20, Morgan Stanley raised the firm’s price target on Edison International (EIX) to $68 from $61 and maintained an Underweight rating on the shares. Morgan Stanley notes that utilities underperformed the S&P’s return this month. Previewing Q4 earnings, the firm expects some balance in the discussion of data center pipelines given increased affordability and political concerns.
Founded in 1886, Edison International is a public utility holding company based in Rosemead, California. Its subsidiaries include Southern California Edison and unregulated non-utility business assets: Edison Energy.
5. UGI Corporation (NYSE:UGI)
Forward P/E: 11.01
On February 5, UGI Corporation (NYSE:UGI) announced its earnings results for Q1 2026. Q1 adjusted EPS was $1.26 compared to $1.37 in the prior-year period, while revenue increased to $2.08 billion from $2.03 billion last year, reflecting steady top-line expansion despite earnings normalization. President and Chief Executive Officer Bob Flexon stated that UGI delivered a solid start to fiscal 2026, achieving 5% growth in total reportable segment EBIT in line with internal expectations. He highlighted strong performance in the natural gas segment, supported by robust demand trends and the implementation of a gas-based rate case at the Pennsylvania utility.
Within the Global LPG segment, favorable weather conditions in certain U.S. regions, combined with operational efficiencies, disciplined margin management, and cost control initiatives, offset the impact of recent divestitures. Management also emphasized ongoing progress in business process enhancements, safety standards, and cultural transformation initiatives, which are intended to strengthen operational resilience and unlock incremental intrinsic value. Looking ahead, the company reiterated its commitment to operational excellence, disciplined capital allocation, and long-term growth execution, reinforcing confidence in sustainable shareholder value creation.
The same day, UGI Corporation (NYSE:UGI) announced the appointment of Sidd Manjeshwar as Chief Strategy Officer, joining the executive leadership team. In this newly established role, Manjeshwar will lead the development and execution of the company’s enterprise-wide strategic vision, including the identification and evaluation of growth opportunities. His prior experience as Senior Vice President and CFO at AdvanSix adds financial and strategic depth to UGI’s leadership bench.
UGI Corporation (NYSE:UGI), formerly United Gas Improvement Corp., is a diversified energy distribution company headquartered in King of Prussia, Pennsylvania, with extensive operations across the United States and Europe. Founded in 1882, the company operates regulated natural gas and electric utilities alongside global LPG distribution businesses.
4. The AES Corporation (NYSE:AES)
Forward P/E: 7.56
On February 20, Morgan Stanley lowered the firm’s price target on The AES Corporation (NYSE:AES) to $23 from $24 while maintaining an Overweight rating. The adjustment reflects broader updates to price targets across Regulated & Diversified Utilities and Independent Power Producers in North America, amid a period in which utilities underperformed the S&P 500. As the firm previews Q4 earnings, it anticipates a more balanced discussion around data center pipeline opportunities, considering affordability dynamics and evolving political considerations. Despite the modest reduction in target price, the continued Overweight rating underscores Morgan Stanley’s view that AES remains attractively positioned relative to peers, particularly given its exposure to long-duration contracted assets and renewable development pipelines.
On February 24, The AES Corporation (NYSE:AES) announced agreements to develop energy generation projects co-located with a new Google data center in Wilbarger County, Texas. These projects, along with secured powered land, will enable Google to expand its operations efficiently while advancing its energy reliability and affordability objectives. The announcement further deepens the long-standing partnership between AES and Google, with AES leveraging its development expertise to secure land and interconnection agreements and construct shared electrical infrastructure for the facility. The companies also entered into 20-year Power Purchase Agreements for the co-located generation assets, which The AES Corporation (NYSE:AES) will own and operate. In addition, AES will provide retail supply, cost optimization, and related services under a long-term energy management agreement. These long-term contracted arrangements enhance revenue visibility, strengthen AES’s position in the rapidly expanding data center market, and support durable cash flow growth.
The AES Corporation (NYSE:AES), founded in 1981 and headquartered in Arlington County, Virginia, is a global power generation and utility company that owns and operates a diversified portfolio of generation assets. It supplies electricity to utilities, industrial customers, and commercial clients.
3. Eversource Energy (NYSE:ES)
Forward P/E: 6.40
On February 17, BMO Capital raised the firm’s price target on Eversource Energy (NYSE:ES) to $79 from $75 while maintaining a Market Perform rating following its Q4 results and updated guidance. The firm noted that the stock’s outperformance on the day was largely attributable to prior year-to-date underperformance and a financing plan that required limited incremental equity, which alleviated dilution concerns.
On February 16, UBS similarly raised its price target on Eversource Energy (NYSE:ES) to $80 from $75 while maintaining a Neutral stance after reviewing the Q4 report, highlighting multiple milestones in 2026 that will shape the company’s trajectory toward achieving the upper half of its 5%–7% long-term EPS growth target for 2025–2030.
Eversource Energy (NYSE:ES) reported Q4 2025 results on February 12, posting full-year 2025 non-GAAP EPS of $4.76 compared to $4.57 in 2024, representing approximately 4.2% growth. Full-year GAAP EPS increased significantly to $4.05 from $2.27, while Q4 EPS reached $1.12 on both a GAAP and non-GAAP basis, improving from GAAP $0.20 and non-GAAP $1.01 in the prior-year quarter. Management introduced 2026 EPS guidance of $4.80–$4.95 and reaffirmed a long-term EPS CAGR target of 5%–7%, with an objective to achieve the upper half of that range by 2028. Additionally, the company paid dividends of $3.01 per share in 2025, reflecting a 5.2% year-over-year increase.
Founded in 1966 and headquartered in Boston, Massachusetts, Eversource Energy (NYSE:ES) operates regulated electric, natural gas, and water utilities across Connecticut, Massachusetts, and New Hampshire.
2. XPLR Infrastructure, LP (NYSE:XIFR)
Forward P/E: 4.79
On February 12, Barclays raised the firm’s price target on XPLR Infrastructure, LP (NYSE:XIFR) to $12 from $10 while maintaining an Underweight rating. On the same day, Mizuho also increased its price target to $12 from $10. While ratings remain cautious, the upward revisions indicate incremental recognition of the company’s asset base and cash flow visibility.
On February 10, XPLR Infrastructure, LP (NYSE:XIFR) reported Q4 2025 results, highlighting full-year 2025 adjusted EBITDA of $1.88 billion and free cash flow before growth of $746 million, underscoring strong cash generation from its contracted clean energy portfolio. For 2026, management guided adjusted EBITDA of $1.75–$1.95 billion and free cash flow before growth of $600–$700 million. The capital plan is expected to be funded primarily through retained cash flows, supplemented by approximately $1.6 billion in project financing commitments and selective corporate debt issuance. This structured financing approach supports continued asset expansion while preserving balance sheet flexibility and limiting equity dilution.
XPLR Infrastructure, LP (NYSE:XIFR), a subsidiary of NextEra Energy headquartered in Juno Beach, Florida, focuses on the acquisition, ownership, and management of contracted renewable energy assets. Founded in 1925, the company benefits from long-term power contracts that provide predictable revenue streams. Its affiliation with a leading renewable energy developer and disciplined funding strategy position it to capitalize on sustained clean energy demand, supporting long-term cash flow durability.
1. Brookfield Infrastructure Corporation (NYSE:BIPC)
Forward P/E: 4.35
On January 28, BMO Capital raised the firm’s price target on Brookfield Infrastructure Corporation (NYSE:BIPC) to $44 from $43 while maintaining an Outperform rating following its Q4 results. The firm noted that the partnership is positioned to benefit from multiple tailwinds in 2026, including solid organic growth, a meaningful acceleration in commissioned capital projects, increased investment activity, and favorable foreign exchange dynamics.
Brookfield Infrastructure Corporation (NYSE:BIPC) reported robust 2025 results, with net income attributable to the partnership rising to $1.1 billion from $391 million in the prior year, and funds from operations increasing 6% to $2.6 billion, or $3.32 per unit. Performance was driven by organic growth at the high end of its target range, inflation-linked revenue escalators, higher throughput volumes, and the commissioning of over $1.5 billion in new projects, partially offset by more than $3 billion in asset sales. The partnership surpassed its $3 billion capital recycling objective and completed $1.1 billion in acquisitions. Notably, its data segment generated more than 50% FFO growth, supported by investments in data centers and fiber infrastructure, and the buildout of a 3.6 GW global data center development pipeline. Brookfield Infrastructure also declared its 17th consecutive distribution increase, reflecting confidence in its self-funding growth model and expectations for accelerated FFO contribution in 2026.
Brookfield Infrastructure Corporation (NYSE:BIPC), founded in 2008 and headquartered in Toronto, Canada, is a publicly traded limited partnership focused on acquiring and managing critical infrastructure assets globally. Its diversified portfolio spans energy, transportation, utilities, and data infrastructure networks that facilitate the movement and storage of essential services. The partnership’s disciplined capital recycling strategy, inflation-protected cash flows, and expanding exposure to digital infrastructure provide a compelling combination of income stability and long-term growth potential for unitholders.
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