In this article, we will look at the 10 Best Regulated Electric Stocks to Buy According to Hedge Funds.
On February 26, A&O Shearman published its outlook on the U.S. renewables and energy landscape, and the takeaways are worth paying attention to for anyone looking at regulated electric stocks in 2026. The report highlighted that demand for energy in the U.S. keeps climbing, pushed higher by data centers, industrial activity, and energy security priorities. Renewable energy, particularly solar, remains a key part of the mix. But the road ahead isn’t without bumps. Tariff volatility, tighter tax credit rules, and growing pressure on residential solar developers are creating a more complicated environment for the sector. As per the report:
The U.S. renewables market is not de-risking through cost declines alone; it is being actively shaped by legal and policy evolution. Energy security is reframing approvals, standards, and subsidies toward reliability, domestic content, and enforceable compliance
That said, the companies that can navigate this, the ones that prioritize reliability, domestic sourcing, and regulatory compliance, are likely to come out ahead. Capital is already moving in that direction. For investors, regulated electric companies with strong fundamentals and grid reliability are becoming an increasingly attractive place to look.
So which regulated electric stocks are worth watching right now? Let’s explore our 10 Best Regulated Electric Stocks to Buy According to Hedge Funds.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed regulated electric companies with market capitalizations above $2 billion. Next, we identified the number of hedge funds that held positions in these stocks by the end of the fourth quarter of 2025. Finally, we selected 10 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Public Service Enterprise Group Inc. (NYSE:PEG)
Public Service Enterprise Group Inc. (NYSE:PEG) is one of the 10 best regulated electric stocks to buy according to hedge funds.
As of the March 13 closing, consensus sentiment for Public Service Enterprise Group Inc. (NYSE:PEG) remained moderately bullish. The stock received coverage from 14 analysts, 7 of whom assigned Buy ratings and 7 gave Hold calls. With no Sell rating, it has a projected median 1-year price target of $91.12. This results in an upside potential of almost 9% at prevailing level.
On March 12, J.P. Morgan increased its target price for Public Service Enterprise Group Inc. (NYSE:PEG) from $85 to $90. The firm reiterated a Neutral rating on the stock, based on adjustments to its models across the North American utilities segment.
On February 27, Scotiabank raised the firm’s price target on Public Service Enterprise Group Inc. (NYSE:PEG) to $92 from $91. The firm maintained its Sector Perform rating on the stock. While the firm acknowledges the company’s consistent track record of outperforming its earnings guidance, it anticipates that near-term investor sentiment will remain heavily influenced by rising affordability concerns.
Public Service Enterprise Group Inc. (NYSE:PEG) operates across the electric and gas utility and nuclear generation segments. The company is involved in the transmission and distribution of electricity and natural gas for commercial, industrial, and residential usage. It also operates solar power projects and energy efficiency programs.
9. Evergy Inc. (NASDAQ:EVRG)
Evergy Inc. (NASDAQ:EVRG) is one of the 10 best regulated electric stocks to buy according to hedge funds.
As of the March 13 closing, Evergy Inc. (NASDAQ:EVRG) carried a moderately bullish consensus sentiment. 6 of the 9 analysts who provided coverage assigned a Buy rating to the stock, while 3 gave Hold calls. With no Sell rating, it has an estimated 1-year median target price of $87.44.
On March 9, Barclays reaffirmed an Overweight rating on Evergy Inc. (NASDAQ:EVRG). The firm also increased its target price on the stock from $82 to $89. The firm acknowledged the company’s base plan, which supports the 8% bottom-line growth target set by the company.
Back on February 23, BMO Capital increased its price target on Evergy Inc. (NASDAQ:EVRG) to $87 from a previous target of $82. The firm maintained its Outperform rating on the company’s shares after its fourth-quarter results.
BMO Capital noted that the company’s results were impacted by unfavorable weather conditions by 2c, convertible notes dilution, and overall demand headwinds. However, investors seemed to be more focused on the company’s outlook, which remained positive.
Evergy Inc. (NASDAQ:EVRG) powers various sectors by generating and distributing electricity from a diverse energy portfolio. Their operations span traditional sources like coal and natural gas, as well as renewable sources like wind and solar. By serving residential, industrial, and municipal clients, they maintain a critical role in providing essential utility services and infrastructure.
8. Entergy Corp. (NYSE:ETR)
Entergy Corp. (NYSE:ETR) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 4, KeyBanc increased the firm’s price target on Entergy Corp. (NYSE:ETR) from $102 to $111. The firm maintained an Overweight rating on the shares. KeyBanc noted that the company’s fourth-quarter results came in largely in line with consensus expectations.
Entergy Corp. (NYSE:ETR) also kept its 2026–2029 guidance unchanged while reaffirming its outlook for more than 8% annual EPS growth through 2029. The firm added that the company increased its recently announced 2026–2029 capital plan by $2 billion and also raised its forecast for long-term sales growth.
On February 20, Morgan Stanley Analyst David Arcaro increased the price target for Entergy Corp. (NYSE:ETR) to $98 from &91. The analyst maintained his Equal Weight rating on the stock.
Arcaro’s price target revision comes on the back of Morgan Stanley’s broader adjustments across the Regulated & Diversified Utilities and Independent Power Producers within the North American region.
Entergy Corp. (NYSE:ETR) serves as a major energy producer and distributor, managing a vast portfolio of approximately 25,000 megawatts. The company utilizes a diverse energy mix, including nuclear, solar, and natural gas, to serve over three million utility customers. Its operations span retail distribution, wholesale power sales, and specialized nuclear decommissioning services.
7. Duke Energy Corp. (NYSE:DUK)
Duke Energy Corp. (NYSE:DUK) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 9, Duke Energy Corp. (NYSE:DUK) revealed its plans to issue an aggregate principal amount of convertible senior notes due 2029 worth $1 billion. The issue will be conducted through a private placement under the Securities Act of 1933, as amended.
According to the company, the net proceeds of the offering would be used to repay the aggregate notional amount of $1.725 billion on its 4.125% Convertible Senior Notes outstanding, along with any cash to be paid upon conversion. These notes are due April 15, 2026.
On February 20, Morgan Stanley increased the firm’s price target on Duke Energy Corp. (NYSE:DUK) to $139 from $130, while maintaining an Equal Weight rating on the shares. Morgan Stanley said the update comes as it revises price targets across regulated and diversified utilities as well as independent power producers in North America.
The firm noted that utility stocks have underperformed the broader market this month, particularly relative to the S&P 500. Looking ahead to fourth quarter earnings, it expects discussions around data center power demand to remain active, though affordability and political considerations may bring a more balanced tone to the outlook.
Duke Energy Corp. (NYSE:DUK) operates as a diversified energy leader through two primary segments: Electric and Gas Utilities. The company maintains a robust generation portfolio, including nuclear, renewables, and natural gas, to serve residential and industrial sectors. Beyond retail distribution, it manages significant infrastructure through pipeline investments and wholesale electricity sales.
6. CMS Energy Corp. (NYSE:CMS)
CMS Energy Corp. (NYSE:CMS) is one of the 10 best regulated electric stocks to buy according to hedge funds.
As of the March 13 closing, CMS Energy Corp. (NYSE:CMS) carried a moderately bullish consensus sentiment. The stock was assigned Buy ratings from 7 of the 11 analysts who provided coverage. There were 4 Hold ratings and no Sell call. It has a 1-year median target price of $80.64.
On February 20, Morgan Stanley increased the price target for CMS Energy Corp. (NYSE:CMS) shares to $80 from $75. The firm reiterated an Equal Weight rating on the stock, based on revisions to its price target tables for Regulated & Diversified Utilities, and IPPs across North America.
Back on February 9, BMO Capital increased the firm’s price target on CMS Energy Corp. (NYSE:CMS) from $79 to $80. The firm also maintained an Outperform rating on the stock following the company’s fourth-quarter earnings beat.
BMO said that CMS Energy’s refreshed capital investment plan, potential for stronger electricity demand growth, and management’s confidence in Michigan’s regulatory framework stand out as key positives. It added that these factors continue to support the company’s attractive risk/return profile and strengthen the broader investment case for the stock.
CMS Energy Corp. (NYSE:CMS) functions as a tripartite power powerhouse, driving massive scale through its Electric, Gas, and NorthStar Clean Energy segments. By masterfully balancing traditional grids with a sprawling infrastructure of high-voltage lines and storage fields, they deliver seamless energy to millions. Their forward-thinking NorthStar division specifically champions independent renewable generation for a diversified industrial future.
5. The Southern Company (NYSE:SO)
The Southern Company (NYSE:SO) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 5, Evercore ISI upgraded The Southern Company (NYSE:SO) stock to an Outperform rating from In Line, and increased its price target to $111 from $103.
The firm stated that it still regarded The Southern Company (NYSE:SO) as a core foundational utility holding business, which has led to it becoming incrementally bullish over the last two months. Evercore believes that the stock is due for another breakout to all-time highs, driven by potential additions to the company’s capital plan. These developments will be driven by a favorable regulatory environment and strategic economic development initiatives.
On March 4, KeyBanc upgraded The Southern Company (NYSE:SO) from an Underweight rating to Sector Weight. KeyBanc’s upgrade reflects a recognition of Southern Company’s valuation compression relative to its utility peers. The firm also noted that recent revisions to earnings growth guidance, combined with constructive operational news flow, suggest a stabilizing fundamental outlook.
The Southern Company (NYSE:SO) operates as a comprehensive energy holding firm, managing a massive, vertically integrated infrastructure. They bridge the gap between generation and delivery by providing retail and wholesale electric services, alongside natural gas distribution and resilient energy solutions, ensuring reliable power across residential, industrial, and governmental sectors nationwide.
4. Xcel Energy Inc. (NASDAQ:XEL)
Xcel Energy Inc. (NASDAQ:XEL) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On February 26, Xcel Energy Inc. (NASDAQ:XEL) announced that its board has approved an increase in quarterly dividend on the company’s common stock to 59.25c per share from 57c previously, bringing the annual payout to $2.37 per share. The dividend will be payable on April 20 to shareholders of record as of March 13. Commenting on the announcement, Chairman, President, and CEO Bob Frenzel stated:
“Xcel Energy Inc. (NASDAQ:XEL) is rewarding its shareholders with higher dividends for the twenty third consecutive year. It was made possible by our more than 11,000 employees striving daily to make energy work better for our customers, and reflects confidence in our long-term growth strategy and financial strength. We are committed to providing predictable and sustainable dividend growth, continuing to target annual dividend increases of 4-6 percent and a payout ratio of 45-55 percent.”
Back on February 24, Xcel Energy Inc. (NASDAQ:XEL) announced its plan to power a new data centre for Google (GOOGL) located in Pine Island, Minnesota. According to the company, the project and the Electric Service Agreement associated with it are anticipated to produce a significant positive impact for the state, coupled with a significant expansion of clean energy developments to support Minnesota’s energy aspirations. According to the company, the growth initiative includes provisions to ensure the benefits of the program for its existing customers.
Xcel Energy Inc. (NASDAQ:XEL) operates as a major utility, managing the generation, transmission, and distribution of electricity and natural gas. Their business model centers on regulated delivery services while driving a strategic shift toward a carbon-free energy portfolio. They provide essential power solutions to millions of residential, commercial, and industrial customers.
3. American Electric Power Company Inc. (NASDAQ:AEP)
American Electric Power Company Inc. (NASDAQ:AEP) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 12, J.P. Morgan increased the firm’s price target on American Electric Power Company Inc. (NASDAQ:AEP) to $139 from $125. The firm also maintained its Neutral rating on the stock. This upward revision follows the firm’s broader update to its valuation models across the North American utilities sector.
Earlier on February 27, UBS upgraded American Electric Power Company Inc. (NASDAQ:AEP) from a Sell to Neutral rating. The firm also increased its price target on the shares from $115 to $132.
UBS said the company appears well-positioned for stronger earnings expansion, now expecting annual growth of about 8%–9% through 2030 compared with last year’s midpoint outlook of around 7%. The firm also pointed out that American Electric Power Company Inc. (NASDAQ:AEP) holds the largest backlog of major electricity load contracts at roughly 56GW and operates the industry’s largest transmission network. According to the firm, these factors provide solid support for the company’s longer-term growth trajectory.
American Electric Power Company Inc. (NASDAQ:AEP) stands as a foundational pillar of the American energy landscape, operating as a massive, vertically integrated utility holding company. Their business centers on managing the complete lifecycle of electricity—from generation to the final delivery to retail and wholesale customers across the country.
2. NextEra Energy Inc. (NYSE:NEE)
NextEra Energy Inc. (NYSE:NEE) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 3, NextEra Energy Inc. (NYSE:NEE) announced that it plans to build new power generation capacity between 15 GW and 30 GW in the U.S. to serve data centres by 2035, based on the company’s presentation. The company stated that 30 GW of capacity could be enough to power 22M homes.
The capacity will be developed mainly through gas-based sources, as the company cited that it had a pipeline of over 20 GW of gas-based generation capacity. The company also plans investor meetings in March to discuss its operations and financial performance.
Back on February 20, Morgan Stanley increased the firm’s price target on NextEra Energy Inc. (NYSE:NEE) to $106 from $104. The firm maintained an Overweight rating on the shares that currently yield an upside potential of more than 14%.
Morgan Stanley reflected on fourth-quarter earnings, suggesting that most discussions would revolve around data center power-demand pipelines, though affordability pressures and political considerations could lead to a more balanced tone.
NextEra Energy Inc. (NYSE:NEE) operates as a dual-engine energy holding company, balancing stable, regulated electric utility services with large-scale, competitive clean energy generation. By leveraging a diverse portfolio of wind, solar, nuclear, and natural gas assets, the company delivers reliable power solutions to millions of retail and wholesale energy customers.
1. PG&E Corp. (NYSE:PCG)
PG&E Corp. (NYSE:PCG) is one of the 10 best regulated electric stocks to buy according to hedge funds.
On March 9, UBS upgraded PG&E Corp. (NYSE:PCG) from a Neutral rating to Buy. The firm also raised the price target from $20 to $23. The thesis hinges on Phase 2 legislation expected before the July 2 recess, which could meaningfully reduce the firm’s utility liability exposure.
The firm also anticipates potential upside in the stock price based on California wildfire policy improvements and better affordability. With the stock currently trading at a 43% price-to-earnings discount to peers, UBS expects continued risk reduction to narrow this valuation gap.
On February 24, Sunrun (RUN) reported that it had successfully completed a dispatch season for its distributed power plant partnership with PG&E Corp. (NYSE:PCG). The program uses customer-owned battery systems to supply electricity to the grid during periods of high demand. Commenting on the milestone, Sunrun CEO Mary Powell, stated:
“Sunrun’s groundbreaking program with PG&E Corp. (NYSE:PCG) shows that distributed power plants can help communities avoid the high cost of adding more poles and wires to accommodate load growth, we saw time and time again that our customers’ batteries delivered location-specific load relief with high precision and consistent performance.”
PG&E Corp. (NYSE:PCG) serves as a massive, dual-utility holding company, managing the generation, transmission, and distribution of both electricity and natural gas. Their business model is defined by operating a highly regulated infrastructure network that provides essential energy services to millions of residential, commercial, industrial, and agricultural customers.
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