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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 Pampa EnergÃa, Telecom Argentina and MYR Group.
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.
MYR Group is a United States and Canada electrical construction leader serving transmission, distribution, substations and clean energy infrastructure. Its utility relationships, multi-year Master Service Agreements, specialized fleet and experience up to 765 kilovolts should help it capture grid reliability, system hardening, electrification, new-generation interconnection and data-center power demand opportunities as utility investment expands across North America in coming years.
Potential Risks
Project timing, regulatory approvals, labor resources, fleet capacity and acquisition integration could pressure execution if utility grid programs, data-center interconnections or clean-energy work progress slower than expected.
Forecast
A Zacks Rank #1 (Strong Buy), with A scores for Growth and Momentum and a D for Value, points to favorable estimate revisions and strong price action despite the weaker valuation profile. The chart shows price breaking higher alongside rising 2026-2028 EPS lines and a steady beat pattern, supporting further revisions if backlog converts cleanly.
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.
Pampa Energía is a diversified Argentine utility and energy company with power generation, transmission and upstream gas operations. Its growth outlook should benefit from efficient thermal plants capturing stronger spot margins under the new market framework, self-supplied gas, additional Perito Moreno pipeline capacity, B2B contracting and the Rincon de Aranda ramp-up supporting future gas availability for power assets overall potential.
Potential Risks
Argentina’s regulatory shifts, delayed RIGI approval, commodity hedges, higher leverage, heavy Capital expenditure, pipeline prepayments and execution risk at Rincon de Aranda could pressure cash flow and returns ahead.
Forecast
A Zacks Rank #1 and a B Value Score support upside, while C Momentum and F Growth are more neutral-to-negative. The chart shows a powerful share-price advance, mostly positive surprise markers and 2026-2028 estimates stepping higher, suggesting sentiment remains constructive but increasingly dependent on policy stability.
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.
Telecom Argentina provides mobile, broadband and Pay-TV services, with regional operations and Personal Pay adding diversification. Its utility-style profile should benefit from continued FTTH and 5G deployment, broadband and Pay-TV subscriber growth, mobile service revenue momentum, stronger profitability and cash generation. A longer debt maturity profile and strong cash position may support investment capacity ahead.
Potential Risks
Risks include inflation, currency devaluation, regulatory changes, competition, technology shifts, rising supplier costs, capital-market access, debt service needs, customer creditworthiness and exchange-rate sensitivity.
Forecast
A Zacks Rank #1, A Value Score and Style Scores of B for both Growth and Momentum create a favorable forward signal. The chart is more volatile than the others. The price has corrected from highs, estimates have swung sharply, and surprises are mixed, but recent upward revisions imply recovery potential if cash flow stabilizes.
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.
ENGIE is an integrated utility spanning power networks, renewables, batteries, gas infrastructure, supply and energy management. Its 2.75% dividend yield adds a useful income component, while the UK Power Networks integration should deepen regulated infrastructure growth. Ongoing renewable and BESS execution, customer demand for longer-term contracts and a derisked asset base may support resilient returns in unpredictable energy markets ahead.
Potential Risks
Risks include geopolitical disruption, regulatory or fiscal changes, permitting and connection constraints, lower power-price upside after derisking, weather effects, and execution challenges across renewables, batteries and disposals programs.
Forecast
A Zacks Rank #2 (Buy) is still favorable, and the B Value Score helps offset D grades for Growth and Momentum. The chart shows a strong share-price climb while consensus estimates remain flatter before a sharp out-year reset, implying investors are paying for stability and future portfolio benefits rather than near-term EPS acceleration.
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.
Sabesp provides water and sewage services in São Paulo, supporting essential sanitation demand. Although its 1.85% dividend yield is modest, the utility’s 2026 Masterplan, capital spending backlog through 2029, metering upgrades, digital service channels and universalization agenda should support broader access, better service quality and operating efficiency, while regulatory discussions may define future investment returns.
Potential Risks
Risks include regulatory accounting, tax reform, city coverage targets, EMAE water integration, tariff review, universalization deadlines, higher debt costs, debt exposure and climate-related assumptions affecting utility returns prospects.
Forecast
A Zacks Rank #2 and B Value Score suggest a constructive but less aggressive setup, while D Growth and C Momentum keep expectations measured. The chart shows a choppy but upward share-price trend, rising 2026-2028 estimates and a mixed surprise record that has recently improved, pointing to upside if tariff outcomes and capex execution remain supportive.
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 +24.00% per year from January, 1988, through May 4, 2026.
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, June 15, 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 
