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.
8. The Southern Company (NYSE:SO)
Stock Upside Potential: 7.69%
Number of Hedge Fund Holders: 54
Southern Co. (NYSE:SO) is one of the top utility stocks to buy now. On April 9, Barclays reiterated an Equal weight on Southern Co. (NYSE:SO) and raised the price target to $99 from $88. The price target hike aligns with the investment bank’s earnings growth expectations.
Barclays expects the company to reaffirm its fiscal 2026 earnings-per-share guidance of $4.50 to $4.60. The firm expects the company to deliver earnings of $1.20 in the first quarter, slightly below the $1.23 delivered in the same quarter last year and consensus estimates of $1.28 a share.
The investment bank has also touted the company’s push to grow earnings by 8% to 9% through 2028 and by 7% to 8% thereafter. The company is also expected to provide earnings-per-share guidance of $5.25 to $5.45 for fiscal 2028.
Sentiments around earnings growth are supported by the $81 billion that Southern Co intends to spend to consolidate rate base growth of about 9%. The company has also outlined $11 billion in equity financing through 2030.
The Southern Company (NYSE:SO) is a major U.S. energy holding company that provides electricity and natural gas to over 9 million customers, primarily in the Southeast. They operate regulated electric utilities, natural gas distribution companies, and a wholesale energy generation company. Additionally, they provide fiber-optic and telecommunications services and develop, build, and operate energy technologies.
7. PPL Corporation (NYSE:PPL)
Stock Upside Potential: 8.30%
Number of Hedge Fund Holders: 42
PPL Corporation (NYSE:PPL) is one of the top utility stocks to buy now. On April 13, Jefferies analysts reiterated their Buy rating on PPL Corporation (NYSE:PPL) and raised the stock’s price target to $48 from $40. The bullishness underscores the research firm’s confidence of a potential positive settlement in a rate case in Pennsylvania.
In addition, Jefferies remains optimistic about new development opportunities in the company’s joint venture with Blackstone. The research firm sees a 6% earnings-per-share upside to 16 cents, given strong capital expenditure opportunities. The company is making significant progress on its Blackstone joint venture, which could deliver 2 gigawatts and be worth 2 cents a share.
On April 13, Wolfe Research raised its price target for PPL Corp. (NYSE:PPL) to $44 from $42, while maintaining an Outperform rating, citing the company’s strong progress in overcoming regulatory challenges. The research firm also touted progress toward achieving a 10% compound annual growth rate in rate base.
PPL Corporation (NYSE:PPL) is a major U.S. utility holding company that generates, transmits, and distributes electricity and natural gas to over 3.6 million customers. Based in Allentown, Pennsylvania, PPL focuses on modernizing energy grids, providing reliable power, and transitioning to cleaner energy sources, aiming for net-zero emissions by 2050.
6. Exelon Corporation (NASDAQ:EXC)
Stock Upside Potential: 8.48%
Number of Hedge Fund Holders: 45
Exelon Corporation (NASDAQ:EXC) is one of the top utility stocks to buy now. On March 26, analysts at Argus reiterated their Buy rating on Exelon Corp (NASDAQ:EXC) and raised the price target to $52 from $48. The positive stance comes on the heels of the company delivering solid fourth quarter 2025 and projecting robust growth.
Adjusted earnings in the fourth quarter were $0.59 per share, beating consensus estimates of $0.54 a share. Full-year net income increased to $2.73 a share from $2.45 a share in 2024. The higher utility earnings were driven by distribution rates at PECO and BGE. The company has already received rate increases for two electric utilities and two gas utilities. Argus expects regulatory impacts to continue driving results in 2026.
Backed by a $41.3 billion four-year capital plan and 7.9% rate base growth, Exelon Corp remains well positioned to deliver annual earnings growth at the top end of 5% to 7%. The growth would come as the company increasingly modernizes energy infrastructure while also providing reliable and resilient service.
Exelon Corporation (NASDAQ:EXC) is a premier U.S. utility company that generates, transmits, and delivers electricity and natural gas. It operates the largest regulated utility portfolio in the country, focusing on grid modernization, renewable energy, and clean energy solutions, with a significant emphasis on nuclear power.
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