In this article, we are going to discuss the 12 best utility stocks to buy now according to hedge funds.
Utilities are generally considered defensive investments, as the demand for electricity, water, and gas remains stable regardless of macroeconomic conditions. As of the writing of this piece, the S&P 500 Utilities index has surged by 7.04% since the beginning of 2026, slightly underperforming the gains of 7.23% posted by the overall S&P 500 during the period.
According to the Energy Information Administration (EIA)’s Short-Term Energy Outlook earlier this month, the US electricity demand is expected to rise from a record 4,195 billion kWh in 2025 to 4,271 billion kWh this year, and then grow further to 4,397 billion kWh in 2027. The soaring demand comes primarily from the sprawling data centers dedicated to AI and cryptocurrency, domestic manufacturing growth, and the general electrification of different sectors.
As more and more data centers pop up across America, the Edison Electric Institute estimates that utilities will invest $1.4 trillion between 2026 and 2030, up from $1.3 trillion spent during the entire prior decade. The combination of a robust demand and rising investments positions the sector to continue delivering strong growth and also sustain its high shareholder returns in the years to come.
With that said, here are the Best Utility Stocks to Buy in 2026.
Our Methodology
To collect data for this article, we used our screeners to identify utility stocks with the highest number of hedge fund holders at the end of Q1 2026, as per the Insider Monkey database. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Utility Stocks to Buy According to 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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
12. Dominion Energy, Inc. (NYSE:D)
Number of Billionaire Holders: 37
Dominion Energy, Inc. (NYSE:D) provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina.
On June 23, Barclays analyst Nicholas Campanella slightly lowered the firm’s price target on Dominion Energy, Inc. (NYSE:D) from $70 to $69, but kept an ‘Overweight’ rating on the shares. The revision comes as part of a Q2 earnings preview.
Dominion Energy, Inc. (NYSE:D) made headlines last month after it was reported that the company is set to be acquired by NextEra Energy in a $66.8 billion deal that will create the largest regulated electric utility in the world. The combined entity will be at the top in the US in total generation, generation built, annual CapEx, rate base, and market capitalization.
The transaction is expected to close in 12 to 18 months, subject to antitrust review, shareholder approval, and regulatory approvals. Barclays expects the merger applications to be submitted ahead of the company’s Q2 earnings call, with investor focus shifting to the regulatory approval process.
11. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 43
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 and businesses across New York City and Westchester County.
On June 23, Argus trimmed its price target on Consolidated Edison, Inc. (NYSE:ED) from $118 to $112, but reaffirmed its ‘Buy’ rating on the shares. The lowered target implies that the shares are fairly valued at the current levels.
Argus noted that Consolidated Edison’s earnings growth has been driven by regulatory increases, and the utility has already filed for further rate hikes for early 2026. The analyst firm also believes that the stock should benefit from improving fundamentals and a positive sector rotation, which has historically happened during periods of expected interest rate cuts.
However, Argus lowered its price objective on TLN after the stock recently soared to its highest level in five years.
Consolidated Edison, Inc. (NYSE:ED) boasts a rich dividend history, having grown its payouts for 54 consecutive years. The stock currently boasts an impressive annual yield of 3.17% and was recently placed in our list of the Top 11 Dividend Kings to Buy for Safe Dividend Growth.
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