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 is growing strongly, with revenue rising faster than inflation and profits improving at an even quicker pace. Its digital business is expanding rapidly and now makes up a larger share of overall sales. The company is also adding new services, using AI in its apps, and generating solid cash flow.
Potential Risks
The business faces risks from geopolitical issues like the war in Ukraine, along with regulatory changes and economic uncertainty in the countries where it operates, which could impact performance.
Forecast
A Zacks Rank #1 (Strong Buy) with Style Scores of A for Value and Momentum signals supportive revisions and trading action even as Growth is F. The Price, Consensus & EPS Surprise chart shows a sharp 2025–2026 estimate reset, and then stabilization, with a mixed but improving beat or miss pattern, leaving room for upward 2026–2027 revisions if operating momentum holds.
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 is performing steadily, with growth coming from both mobile and broadband services. It is gaining more high-value customers, especially in postpaid plans, while expanding its fiber network and 5G usage. Customers are spending more on services, and fewer are leaving. Newer digital and business services are growing fast, helping the company earn more consistently over time.
Potential Risks
The telecom market in Brazil is highly competitive, and too many players in fiber could pressure growth. Ongoing investments and pricing changes may also impact margins and future performance.
Forecast
With a Zacks Rank #1 and Style Scores of B for Value and Momentum and C for Growth, revisions and relative strength look aligned while valuation support remains reasonable. The chart shows 2025 estimates drifting lower before turning up for 2026–2027, alongside a mostly positive recent surprise streak, an encouraging setup if management keeps converting demand into incremental earnings and dividends.
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 is a leading electrical contractor with a wide presence across the U.S. and Canada and a large, skilled workforce. It has strong relationships with customers, many of whom return for repeat business. With a large backlog of work and rising demand from areas like data centers and power infrastructure, the company is well placed for steady growth ahead.
Potential Risks
Performance depends on future project flow and demand for infrastructure work. Any slowdown in spending on data centers, power systems, or construction activity could impact growth and earnings.
Forecast
A Zacks Rank #1 pairs with Growth A but Style Scores of D for Value and Momentum, implying revisions are favorable while the setup is less forgiving. The chart shows 2025 estimates stepping down in 2024, then 2026–2027 stair-stepping higher as surprises turned mostly positive, so upside depends on sustaining clean job closeouts to keep revisions rising.
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 is shifting toward faster-growing digital and cloud-based services that support AI and enterprise demand. Its fiber network enables high-speed, low-latency connectivity, while scalable digital offerings require less capital. With ongoing cost reductions and a focus on higher-margin services, the company is improving efficiency and positioning itself for stronger cash flows and a more stable long-term business.
Potential Risks
Older parts of the business are shrinking, and the company must successfully cut costs and grow new services. If execution falters or investments take longer to pay off, financial performance could suffer.
Forecast
A Zacks Rank #1 with B for Value, C for Growth and D for Momentum suggests revisions are improving, but price strength is uneven. The chart shows 2025–2026 estimates recovering from deeply negative levels, with small beats mixed with misses, so the next leg higher likely needs steadier surprises and clearer 2026–2027 estimate upgrades.
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.
Essential Utilities benefits from a highly stable, low-risk utility platform supported by durable cash flows and a strengthened balance sheet, enabling continued infrastructure investment. The company targets 7% to 9% long-term EPS and dividend growth, driven by acquisitions and core expansion, while operating in constructive regulatory environments that support rate-based growth and earnings visibility.
Potential Risks
Growth depends on regulatory approvals, merger execution and realizing expected synergies. Capital-intensive infrastructure needs, integration challenges and exposure to macro factors like interest rates and inflation may pressure returns and timelines.
Forecast
A Zacks Rank #2 (Buy) with D for Value, F for Growth and B for Momentum points to decent trend support but limited valuation appeal. The chart shows 2025–2027 EPS lines largely flat to modestly higher and a pattern of small, mixed surprises, suggesting total return may lean on the 3.40% yield and steady, incremental estimate creep.
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, March 30, 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 
