We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The utilities sector includes electric, gas, and water providers that operate in regulated markets.
As utility stocks offer predictable revenue, they are seen as defensive holdings in a diversified portfolio.
Top utility stocks to buy now include VEON, Telefônica Brasil and Lumen Technologies.
Utility stocks have long served as a cornerstone for conservative investors seeking income, relative stability, and downside protection. In periods of economic uncertainty, their regulated business models and consistent cash flows tend to stand out. Now, as interest rate expectations evolve and electricity demand accelerates from AI data centers, broader electrification, and renewable energy expansion, the sector is drawing renewed attention in 2026.
Below is a comprehensive guide to the best utility stocks, highlighting high performers, leading dividend payers, potentially undervalued opportunities, and companies with durable long term compounding potential.
Utility Stock Market Overview and Forecast
The utilities sector includes electric, gas, and water providers that operate in regulated markets. Because these companies generate predictable revenue streams, they are often seen as defensive holdings within a diversified portfolio.
In 2026, several forces are shaping the sector:
Rising electricity demand from data centers and AI infrastructure.
Grid modernization and renewable energy investments.
Interest-rate stabilization after prior tightening cycles.
Increased focus on ESG and decarbonization initiatives.
Utilities have historically outperformed during volatile or slowing markets, though they can lag in strong bull runs when investors favor higher growth sectors. Even so, improving earnings outlooks and capital investment plans are helping narrow that performance gap.
Is Now a Good Time to Invest in Utility Stocks?
Many analysts suggest utilities may benefit if interest rates stabilize or decline. Lower borrowing costs can improve margins because utilities rely heavily on debt financing for infrastructure projects. Meanwhile, steady dividend yields — often ranging between 3% and 6% — remain attractive compared to broader market averages.
Below, we examine and rank leading utility stocks using a blend of Zacks Rank signals, Style Scores, and core fundamental metrics to identify companies that may offer compelling long term opportunities for patient investors.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
VEON runs mobile networks and digital services across frontier markets, giving it utility-like recurring demand for connectivity. In Q4 2025, revenue and EBITDA accelerated as pricing discipline and data growth combined with surging digital revenues, which rose to a much larger share of sales, reinforcing a mix shift away from pure telecom. Management also highlighted continued execution on monetization and cash generation, which matters for a business exposed to volatile local currencies.
Potential Risks
Operations are concentrated in markets where FX swings, regulation, and geopolitical disruption can quickly pressure reported results, capex timing, and repatriation of cash.
Forecast
A Zacks Rank #1 (Strong Buy) plus Style Scores of A for Value and B for Momentum suggest revisions and price action are supportive despite a weak F for Growth. The Price, Consensus & EPS Surprise chart shows firmer 2026–2027 lines, with a choppier surprise history.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Telefônica Brasil provides mobile and fixed connectivity in Brazil, a regulated, utility-adjacent service with resilient subscriber demand. In the latest quarter, management pointed to consistent revenue and EBITDA expansion alongside high net income and cash generation, reflecting postpaid and fiber momentum and operating leverage. That mix can support shareholder returns, and the stock’s dividend yield adds a tangible component to total return.
Potential Risks
Brazilian macro variables, including rates, inflation, and FX, can swing telecom spending, results, and valuation, while ANATEL regulation and competitive intensity can cap pricing power.
Forecast
A Zacks Rank #1 is a positive signal for estimate direction, but B for Value, C for Growth and D for Momentum argue for selective entry points. The chart shows the 2026–2027 consensus trending higher. Earnings surprises look mixed, so sustained upside likely requires continued estimate lift rather than one-off beats.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Lumen operates a fiber-heavy communications infrastructure that functions like a “digital utility” for enterprises and public-sector customers. In the most recent quarter, the company emphasized a simpler, more enterprise-focused profile and highlighted progress on contracts tied to Private Connectivity Fabric and NaaS adoption. The close of the AT&T transaction also meaningfully reduced debt and interest burden, improving strategic flexibility.
Potential Risks
Even with balance-sheet relief, Lumen still faces legacy revenue erosion and execution risk in translating AI-era connectivity demand into durable growth. High operating leverage can amplify any slowdown in bookings or delays in modernization benefits.
Forecast
A Zacks Rank #1 with B for Value, Growth and Momentum signals strong combined factor support. The chart shows an upward turn for 2026 estimates as recent surprises improve, suggesting the next leg depends on continued upward revisions, not just a rebound in the share price.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
MYR Group builds and maintains electric transmission and distribution infrastructure, directly leveraged to the utility grid buildout. In its latest reported quarter, margins improved from the prior year as prior project issues rolled off and productivity and change orders aided results, with management citing electrification-driven demand as a supportive backdrop. That combination of execution normalization and secular capex can keep backlog converting into higher-quality earnings.
Potential Risks
This is still a project business: fixed-price work can create sudden margin volatility from cost overruns, weather, labor constraints, or supply-chain disruptions, and the timing of awards can make quarterly comparisons lumpy.
Forecast
A Zacks Rank #1 and a Growth Score of A lean bullish, even with D for Value and Momentum. The chart shows rising 2026–2027 consensus estimates and a steadier run of positive surprises, aligning with the stock’s strong uptrend, if execution stays clean.
This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.
The Zacks Sector Rank assigns a rating to each of the 16 Sectors based on their average Zacks Rank.
A sector with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
The sector with the best average Zacks Rank would be considered the top sector (1 out of 16), which would place it in the top 1% of Zacks Ranked Sectors. The sector with the worst average Zacks Rank (16 out of 16) would place in the bottom 1%.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.
Value ScoreA
Growth ScoreA
Momentum ScoreA
VGM ScoreA
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
The technique has proven to be very useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest.
Brookfield Renewable owns and operates global renewable generation, offering utility-like contracted cash flows tied to electrification demand. In its latest quarterly update, Brookfield highlighted higher FFO per unit, contributions from development and acquisitions, and another distribution increase, underscoring a visible growth engine alongside income. Its scale and capital-recycling model can help fund new projects without fully relying on external equity markets.
Potential Risks
Results can be sensitive to hydro and wind variability and to financing conditions. Higher rates can pressure valuations and raise the hurdle for new builds, while merchant power exposure can add volatility.
Forecast
A Zacks Rank #2 (Buy) is constructive with A for Momentum helping offset C for Value and F for Growth. The chart shows estimates stabilizing and edging up for 2026–2027, with mixed surprises. It suggests returns may hinge on steady revisions and the dividend rather than repeated blowout beats.
The Zacks Rank is a proprietary stock-rating model that uses trends in earnings estimate revisions and earnings-per-share (EPS) surprises to classify stocks into five groups: #1 (Strong Buy), #2 (Buy), #3 (Hold), #4 (Sell) and #5 (Strong Sell). The Zacks Rank is calculated through four primary factors related to earnings estimates: analysts' consensus on earnings estimate revisions, the magnitude of revision change, the upside potential and estimate surprise (or the degree in which earnings per share deviated from the previous quarter).
Zacks builds the data from 3,000 analysts at over 150 different brokerage firms. The average yearly gain for Zacks Rank #1 (Strong Buy) stocks is +23.62% per year from January, 1988, through June 2, 2025.
Selections for Best Utility Stocks are based on the current top ranking stocks based on Zacks Indicator Score, Style Scores and fundamentals. All stocks have a daily trading volume of at least 100,000 shares and have a stock price of at least $5. All information is current as of market open, April 6, 2026.
Guide to Best Utility Stocks: What Are Utility Stocks?
Utility stocks represent companies that provide essential services like electricity, natural gas, and water to residential and commercial customers.
How Do Utility Stocks Work?
Most utilities operate as regulated monopolies within defined geographic areas. State regulators set allowable rates of return, creating predictable revenue streams in exchange for infrastructure investment.
Why Do People Invest in Utility Stocks?
Reliable dividend income.
Lower volatility relative to growth stocks.
Defensive performance during economic slowdowns.
How Often Do Utility Stocks Pay Dividends in a Year?
Most U.S. utility companies pay dividends quarterly (four times per year).
Pros of Utility Stocks
Stable cash flow.
Recession resilience.
Attractive dividend yields.
Essential-service demand.
Cons of Utility Stocks
Interest-rate sensitivity.
Heavy capital expenditure needs.
Regulatory risk.
Slower growth compared to tech sectors.
Utility ETFs vs Utility Stocks
Investors can choose individual stocks or diversified ETFs.
Best Utility ETFs
Utilities Select Sector SPDR Fund (XLU)
Vanguard Utilities ETF (VPU)
iShares U.S. Utilities ETF (IDU)
ETFs offer instant diversification, while individual stocks may provide higher upside potential.
How to Choose the Best Utility Stocks
Consider:
Dividend yield and payout ratio.
Earnings and revenue consistency.
Regulatory environment strength.
Debt levels and credit ratings.
Renewable transition strategy.
Long-term infrastructure growth plans.
What Are the Utility Stocks That Are Good Investments?
Electric: Duke Energy (DUK), NextEra Energy (NEE). Water: American Water Works (AWK). Gas: Atmos Energy (ATO). ESG-friendly: Xcel Energy (XEL), NextEra Energy (NEE).
How to Buy Utility Stocks
Open a brokerage account.
Research financials and dividend history.
Decide between individual stocks or ETFs.
Monitor regulatory developments and earnings reports.
Tips for Building a Utility Portfolio
Blend high-yield and growth utilities.
Diversify across electric, gas, and water.
Include at least one ETF for balance.
Reinvest dividends for compounding.
Frequently Asked Questions About Utility Stocks
How Are Utility Dividends Taxed?
Most are qualified dividends taxed at long-term capital gains rates, though investors should verify individual tax situations.
Are Utility Stocks Safe During Recessions?
Historically, utilities have outperformed the broader market during downturns because demand for electricity and water remains steady.
What’s a Good Dividend Yield for Utility Stocks?
According to industry rankings from research firms like Zacks, many electric utilities historically yield between 3% and 5%, higher than the broader S&P 500 average.
Are Utility Stocks Safe for Beginners?
Yes, they are often considered beginner-friendly due to predictable earnings and dividends.
Are Utility Stocks Good for Passive Income?
They are widely used in income-focused portfolios because of consistent quarterly payouts.
How Do Utility Stocks Perform During Market Downturns?
They typically decline less than high-growth sectors but may still experience volatility during severe selloffs.
Is Now a Good Time to Invest in Utility Stocks?
With rising electricity demand and potential interest-rate stabilization, 2025 presents favorable conditions for selective utility investments.
How Do Rising Interest Rates Affect Utility Stocks?
Higher rates can pressure valuations because utilities rely heavily on debt and compete with bond yields for income-focused investors.
Bottom Line
The best utility stocks in March 2025 combine reliable dividends, manageable debt, constructive regulatory environments, and exposure to long-term electrification trends. Whether you prioritize income, growth, or retirement stability, utilities remain a foundational sector for diversified portfolios.
View the Zacks #1 Rank List
Strong Buy 
