In this article, we explore the Top 10 Utility Stocks to Buy Now.
The utility sector is proving a firm favorite with investors, unlike in the past, when it was known only for stability rather than growth. The S&P 500 Utility sector is up about 7% year to date, outpacing the broader market, which is up about 1%. Over the past 12 months, the utilities sector has rallied by 33%, compared with a 27% gain for the broader US market.
In addition, utilities have more than doubled on a return basis since October 2023 lows, giving rise to the strongest two-year rally in two decades. The outperformance comes as utility stocks rally, driven by growing demand for energy to power data centers, electric vehicles, and domestic manufacturing.
“Earnings should keep growing, supporting utilities returns,” Morningstar analysts Travis Miller and Andrew Bischof wrote in a recent report.
Investors are reaping big amid rising electricity demand. For starters, a good chunk of the top utility stocks yield an average dividend of 3%. However, this is considered low, as it is roughly one percentage point below the current yield of 10-year Treasuries, which stands at around 4%. The low yield for utilities results from the sector’s rally since dividend yields move inversely to stock prices and depend on dividend payouts.
“This marks a generational shift, as investors have started to value utilities’ growth over their yield,” Miller and Bischof write.
Amid the low yields on offer, utility stocks outlook remains positive amid heightened focus on growth. States approving utility rate increases at levels not seen over a decade further asserts the long-term outlook. Additionally, the companies are well-positioned to benefit as demand for energy to power data centers soars.
Unlike in the past, utility stocks are no longer safe defensive dividend plays. Instead, they are growth stories driven by structural shifts in demand. With that in mind, let’s take a look at some of the best utility stocks to buy now.
Our Methodology
To shortlist the Top 10 Utility Stocks to Buy Now, we used Finviz screener and ETFs to scan for the biggest utility stocks by market cap. We trimmed the list to focus on utility stocks with upside potential of more than 5%, and that are popular among elite hedge funds in Q4 2025. Finally, we ranked the stocks in ascending order based on their upside potential as of April 15.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Top Utility Stocks to Buy Now
10. Duke Energy Corporation (NYSE:DUK)
Stock Upside Potential: 7.09%
Number of Hedge Fund Holders: 51
Duke Energy Corporation (NYSE:DUK) is one of the top utility stocks to buy now. On April 13, analysts at BMO Capital reiterated an Outperform rating on Duke Energy Corporation (NYSE:DUK) and increased the price target to $143 from $136.
The research firm reiterates its expectation of a limited set of updates in the upcoming May 5 earnings release for the first quarter of 2026. Nevertheless, it expects investors to pay close attention to the ongoing North Carolina rate case and the IURC listening meetings.
The firm, however, remains bullish on the company’s long-term prospects, driven by continued large-scale onboarding activity. That’s because the company’s forecasts reflect just 75% data center uptake, leaving room for earnings and growth upside heading into 2028 .
Duke Energy is poised to reduce its debt by about $800 million upon completing the sale of its Tennessee Piedmont Natural Gas business to Spire Inc. for $2.48 billion. The transaction is poised to help the company efficiently fund its capital plan.
Duke Energy Corporation (NYSE:DUK) is one of America’s largest energy holding companies, serving 8.6 million electric customers and 1.7 million natural gas customers across six states in the Southeast and Midwest. It generates, transmits, and delivers electricity and natural gas, with a focus on modernizing the grid and investing in renewables, nuclear, and natural gas infrastructure.
9. DTE Energy Company (NYSE:DTE)
Stock Upside Potential: 7.45%
Number of Hedge Fund Holders 46
DTE Energy (NYSE:DTE) is one of the top utility stocks to buy now. On April 9, analysts at Jefferies reiterated their Buy rating on DTE Energy (NYSE:DTE) and raised the price target to $170 from $153. The price target hike comes on the heels of the company inking a new data center deal with Google in Michigan. The company is to provide electric service and renewable energy deployment as part of the deal.
The 1 gigawatt deal underscores the growing demand for clean energy, presenting an opportunity for DTE Energy to capitalize on data center opportunities. The company has already inked two data center deals, helping strengthen its client base. It could also ink a third deal in the second half of the year, according to the research firm.
According to Jefferies, the wave of data center deals opens the door for the company to deliver a compound annual growth rate of 8% or higher through 2030. The robust growth remains well supported by a pipeline of 5 to 6 gigawatts of power, with about 2 gigawatts in the late stages of development.
DTE Energy Company (NYSE:DTE) is a Detroit-based diversified energy company that generates, transmits, and distributes electricity to 2.3 million customers and provides natural gas to 1.4 million customers. The company operates a mixed energy portfolio (coal, nuclear, natural gas, wind, solar) and is expanding into renewable energy, gas storage, and non-utility energy-related projects.
