The Best Utilities Stocks to Buy

Utilities stocks appeal to investors for a few different reasons.

• They are considered defensive investments, as demand for electricity, water, and gas remains stable regardless of economic conditions.
• Many offer attractive yields and therefore appeal to investors who like high-dividend stocks.
• Utilities companies often operate in regulated industries, providing consistent revenue and earnings, which can reduce volatility in a portfolio.

In the year to date, the Morningstar US Utilities Index rose 0.41%, while the Morningstar US Total Market Index gained 12.92%.

The 10 Best Utilities Stocks to Buy Now

These were the most undervalued utilities stocks that Morningstar’s analysts cover as of Sept. 11, 2026.

1. PG&E PCG
2. Edison International EIX
3. National Grid NGG
4. DTE Energy DTE
5. Portland General Electric POR
6. Alliant Energy LNT
7. American Electric Power AEP
8. WEC Energy Group WEC
9. CenterPoint Energy CNP
10. Duke Energy DUK

To come up with our list of the best utilities stocks to buy now, we screened for:

• Utilities stocks that are undervalued, as measured by our
  price/fair value
  metric.
• Stocks that earn narrow or wide
  Morningstar Economic Moat Ratings
  , as well as companies that do not have a moat. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.
• Stocks that earn a Low, Medium, High, or Very High
  Morningstar Uncertainty Rating
  , which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best utilities stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Sept. 11, 2026.

PG&E

• Morningstar Price/Fair Value: 0.67
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 1.45%
• Industry: Utilities—Regulated Electric

PG&E is the most affordable stock on our list of the best utilities stocks to buy. PG&E is a holding company whose main subsidiary is Pacific Gas and Electric, a regulated utility operating in Central and Northern California that serves 5.7 million electricity customers and 4.6 million gas customers in 47 of the state’s 58 counties. The stock is trading 33% below our fair value estimate of $20.50 per share.

With PG&E’s 2019-20 bankruptcy well behind it, the company is in the early stages of a large growth opportunity. California’s ambitious energy and environmental policies, including eliminating economywide carbon emissions by 2045, will require substantial infrastructure investment to electrify buildings and transportation.

Even with a slight dip in growth investment in 2026, we still expect PG&E to invest more than $73 billion in 2026-30, leading to at least 9% annual earnings growth, one of the highest growth rates among US utilities.

California has constructive utility rate regulation that includes usage-decoupled rates, four-year rate reviews, and allowed returns above the industry average. PG&E’s 2023-26 general rate case ended with what we consider a constructive outcome that supports clean energy and safety investment. PG&E’s 2027-30 rate proposal extends its growth plan.

Electrification and decarbonization likely will mean PG&E’s natural gas business shrinks as a share of total earnings.

PG&E emerged from bankruptcy in July 2020 after 17 months of negotiations with 2017-18 Northern California fire victims, insurance companies, and other stakeholders. Shareholders lost some $30 billion of value from settlements, fines, and costs but retained control of the company. Bondholders were mostly made whole.

PG&E will always face public and regulatory scrutiny as the largest utility in California. Deadly wildfires and power outages have escalated that scrutiny. Legislative and regulatory changes since PG&E’s bankruptcy have reduced the company’s financial risk, but the state’s inverse condemnation strict liability standard remains a concern.

Mending PG&E’s relationships with customers, regulators, politicians, and investors will take time. PG&E has avoided any major safety or operational missteps for several years.

PG&E has faced other major challenges during the last 30 years. The deadly 2010 San Bruno gas pipeline explosion resulted in some $3 billion of lost shareholder value from fines and penalties. PG&E also spent 2001-04 in bankruptcy during California’s energy crisis because of regulators’ misguided deregulation effort.

Read more about PG&E here.

Edison International

• Morningstar Price/Fair Value: 0.69
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 6.27%
• Industry: Utilities—Regulated Electric

Edison International is the parent company of Southern California Edison, an electric utility that distributes electricity to 5 million customers in a 50,000-square-mile area of Southern California, excluding Los Angeles. Edison International is an affordable utilities stock, trading at a 31% discount to our fair value estimate of $81 per share. The regulated electric company earns a narrow economic moat rating.

Edison International is well positioned to grow faster than most utilities as California pursues ambitious clean energy and electrification goals. However, past and future possible wildfire liabilities create more risk than most utilities face.

California’s quest to eliminate carbon emissions from its economy by 2045 will require a huge buildout of the state’s electric grid infrastructure. This includes investments to support grid safety, renewable energy, electric vehicles, distributed generation, and energy storage.

We forecast Edison’s capital investment will grow to nearly $8 billion annually by 2028, supporting a long runway of 7% annual core earnings growth, subject to regulatory approvals.

Constructive regulatory outcomes like Edison’s 2025-28 general rate case provide near-term clarity for the company’s investment plan. Operating-cost discipline will be critical for Edison to avoid large customer bill increases related to its investment plan.

Large equity issuances in 2019 and 2020—in part to fund the company’s $2.4 billion contribution to the state wildfire insurance fund and a higher equity allowance for ratemaking—along with higher borrowing costs have weighed on earnings growth the past five years.

That earnings drag is much smaller after regulators approved recovery and securitization of $3.6 billion of costs related to the 2017-18 wildfire and mudslides. That should boost cash in 2026. Settlement costs related to the Eaton fire could be a slight near-term drag, but provisions in California’s AB 1054 and SB 254 legislation should minimize long-term cash flow constraints.

Even if Edison faces modest costs and liabilities from the 2025 Eaton Fire, we think it will be able to fund its growth investments and continue its 22-year streak of annual dividend increases.

Edison’s management team seems committed to retaining a small share of unregulated earnings likely tied to low-risk energy management businesses wrapped into Edison Energy. We don’t expect that business to have a material impact on shareholder returns in the near term.

Read more about Edison International here.

National Grid

• Morningstar Price/Fair Value: 0.78
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 4.21%
• Industry: Utilities—Regulated Electric

Next on our list is National Grid, which owns and operates the electric transmission system in England and Wales. The stock is trading at a 22% discount to our fair value estimate of $98 per share.

National Grid owns and operates energy networks in the UK and the Northeastern United States. The former accounts for around 60% of the profits, the latter for 40%.

For the 2026-31 RIIO-T3 UK electricity regulatory regime, the real return on equity rose to 5.7% from 4.3%. Combined with a real cost of debt of 3.4%, this implies a real weighted average cost of capital of 4.42% and a nominal WACC of 6.6%. National Grid is confident it can achieve a nominal return on equity of 9% under RIIO-3 by delivering a good chunk of the efficiencies incentivized by the regulator. We concur with the group’s confidence, given its strong track record in the business and the improvements to the efficiency-sharing mechanism under RIIO-3. Accordingly, we project the group’s UK electricity transmission core business to deliver a nominal WACC of 7.1% under RIIO-3.

In May 2024, National Grid released a five-year strategic plan calling for a 50% step-up in investments to be funded by a GBP 7 billion rights issue and noncore asset disposals. The step-up in investment was primarily driven by the construction of new transmission lines between wind farms in the North and South of England.

The rights issue resulted in a 10% dilution. In addition, the dividend per share was rebased, resulting in a 20% drop in fiscal 2025 versus 2024. This was a turning point, since the firm has been increasing the dividend every year since 1998.

In February 2026, National Grid rolled over its five-year business plan to 2031. It maintained its previous target of a 10% CAGR in regulated asset value and dividend growth in line with the UK Consumer Prices Index, including owner occupiers’ housing costs, or CPIH, while upping its EPS CAGR from 6%-8% to 8%-10% thanks to the return incentives it expects to achieve under RIIO-T3.

In July 2026, National Grid agreed to invest $1.75 billion to fund a very large combined-cycle gas turbine that will supply dedicated electricity to a Microsoft data center campus. The transaction gives National Grid exposure to a potentially significant new growth avenue as artificial-intelligence-driven power demand accelerates. However, scaling this opportunity could eventually require additional capital.

Read more about National Grid here.

DTE Energy

• Morningstar Price/Fair Value: 0.84
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 3.51%
• Industry: Utilities—Regulated Electric

DTE Energy owns two regulated utilities in Michigan that contribute 90% of earnings. The firm earns a narrow economic moat rating and the shares of its stock look 16% undervalued relative to our $157 fair value estimate.

A decade-long transformation of Michigan’s utility regulation and DTE Energy’s business mix has set up the company for a long runway of growth investment opportunities.

Michigan’s clean energy transition, focus on electric grid reliability, and new data center energy demand support this growth.

Michigan’s utility rate regulation has turned mostly constructive in recent years, resulting in earnings growth and investment at DTE Energy’s electric and gas utilities. Another round of electric and gas regulatory reviews in 2026-27 will continue to test the regulatory environment.

We expect DTE’s electric and gas utilities will contribute more than 90% of its operating earnings. State requirements to improve energy reliability and accelerate clean energy investment are the bulk of management’s $36.5 billion investment plan during the next five years. That could grow as DTE signs more data center contracts. This is well above DTE’s historical investment levels.

DTE Electric is investing heavily in gas power generation and renewable energy to replace its aging coal fleet. DTE’s 20-year integrated resource plan settlement in mid-2023 targets 6.5 gigawatts of new solar generation and 8.9 GW of new wind generation while eliminating coal. State legislation in late 2023 includes a 100% clean energy standard by 2040. DTE also plans to add energy storage to serve data centers.

DTE’s gas and electric rate reviews and investment plan support our 8% annual earnings growth forecast, at the high end of management’s 6%-8% target. Commissioners have supported a 9.9% allowed return on equity to set electric rates. We think it supports growth while moderating customer bill impacts.

DTE’s nonutility business, DTE Vantage, is only about 10% of normalized earnings following the July 2021 split-off of DT Midstream. The unit has a growing portfolio of clean energy projects to help offset the expiration of tax credits in 2029.

DTE’s board has raised the dividend every year since the reset following the DTM spinoff in mid-2021, most recently a 7% increase for 2026. We expect the dividend to grow in line with earnings for the foreseeable future.

Read more about DTE Energy here.

Portland General Electric

• Morningstar Price/Fair Value: 0.86
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 4.57%
• Industry: Utilities—Regulated Electric

Portland General Electric is a regulated electric utility providing generation, transmission, and distribution services in a service territory that includes about half of all Oregon residents and two-thirds of the state’s business activity. Portland General Electric is an affordable utilities stock, trading at a 14% discount to our fair value estimate of $56 per share. The regulated electric company earns a narrow economic moat rating.

Portland General Electric has plenty of investment opportunities to serve growing electricity demand, meet Oregon’s clean energy requirements, and strengthen the system against natural disasters such as wildfires.

Oregon legislation requires PGE to cut carbon emissions on its system by 80% by 2030 and eliminate carbon emissions by 2040. Achieving these goals while maintaining reliability amid fast-growing electricity demand among large customers will require a large step-up in investment during the next decade.

PGE plans to invest $7.6 billion during the next five years, a 16% increase from its previous five-year plan. We think that investment could go higher if Portland General receives regulatory approval for more clean energy projects. Transmission is another growth investment opportunity.

Oregon regulation has turned mostly constructive, with forward-looking rates and timely decisions. The state’s 20-year integrated resource plan and four-year action plan give PGE and regulators clarity on potential growth investments.

Portland General’s proposed $1.9 billion acquisition of Berkshire Hathaway Energy’s Washington utilities would diversify its regulatory exposure and growth plan, although the deal will face regulatory scrutiny.

An unfavorable decision in PGE’s 2025 general rate case, including a slight reduction in its allowed return on equity to 9.34%, was a shift from recent years. PGE had settled its previous four rate reviews—most recently in late 2023—demonstrating support from many stakeholders. PGE is seeking another general rate increase in 2027.

Electricity demand growth in the region should reduce regulatory risk as costs are spread over a larger customer base. PGE also benefits from renewable energy-specific ratemaking, reducing the need for lengthy base rate reviews.

PGE’s board created some uncertainty when it skipped a dividend increase in April 2020 before raising it in July 2020, keeping PGE’s annual dividend growth streak intact. We think dividend growth will trail earnings growth slightly while PGE goes through this large investment cycle.

Read more about Portland General Electric here.

Alliant Energy

• Morningstar Price/Fair Value: 0.87
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 3.18%
• Industry: Utilities—Regulated Electric

Alliant Energy is the parent of two regulated utilities, Interstate Power and Light and Wisconsin Power and Light. The firm earns a narrow economic moat rating, and the shares of its stock look 13% undervalued relative to our $77 fair value estimate.

Alliant Energy operates two utilities in the Midwest, Wisconsin Power and Light and Interstate Power and Light, which operates in Iowa.

The company’s $13.4 billion capital investment plan for 2026-29 is nearly double its plan from less than four years ago. The increase is in large part to support increasing data center electricity demand. Alliant forecasts a 60% increase in projected demand by 2031.

We expect continued investments to support this growth. Management has said they are continuing to plan for growth beyond its base case. We forecast the company will achieve the high end of management’s 5%-7% annual earnings growth target through 2027, and exceed management’s 7%-plus growth expectation from 2027-29.

Alliant has five data center customers as of early 2026, representing 3.4 gigawatts of demand. We think management will continue to identify additional data center opportunities.

Three of the data center campuses have started construction in Alliant’s service territory. The other two have signed electric service agreements. Management has discussed 2-4 GW of additional data center opportunities that could materialize later in the planning period.

Alliant benefits from operating in two constructive regulatory jurisdictions. To maintain earned returns near allowed returns during this period of high investment, management has worked to reduce regulatory lag, has received above-average allowed returns across its subsidiaries, and aims to continue reducing operating costs in the near term.

Wisconsin regulators approved subsidiary WPL’s 2026-27 rate case settlement, including a 9.8% allowed return on equity. The decision was in line with our expectations and supports our constructive view of Wisconsin regulation. IPL shouldn’t need to file for new rates for at least four years.

American Transmission, which we consider a wide-moat business, is tucked away from consolidated results (16% equity interest). Transmission offers higher returns relative to other rate-regulated investments.

Read more about Alliant Energy here.

American Electric Power

• Morningstar Price/Fair Value: 0.87
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 3.08%
• Industry: Utilities—Regulated Electric

American Electric Power is one of the largest regulated utilities in the United States, providing electricity generation, transmission, and distribution to more than 5 million customers in 11 states. The firm earns a narrow economic moat rating, and the shares of its stock look 13% undervalued relative to our $141 fair value estimate.

American Electric Power operates numerous utilities, providing investors with protection against any single adverse regulatory ruling.

Most of the company’s capital investment plan focuses on regulated investments. This investment supports management’s 7% to 9% earnings growth target from 2026-30. Management continues to raise its investment outlook and, as of May, now expects to achieve 9% annual earnings growth. We think that is achievable.

AEP plans to invest $78 billion in 2026-30 and has identified another $10 billion of possible incremental investment. This is up $6 billion from its plan announced in November 2025, which was up 33% from management’s prior five-year investment plan.

AEP’s system peak demand could increase by 63 gigawatts by year-end 2030, with load additions in Texas, the mid-Atlantic, and the southwest. Data centers account for more than 80% of this incremental load. The new demand is supported by either signed energy service agreements or letters of agreement, which give us confidence in the company’s growth outlook.

AEP’s plan focuses on transmission and distribution investments, which we think are the most attractive long-term growth opportunities given federal incentives to improve the efficiency of the US power grid.

Transmission and distribution investments account for nearly two-thirds of AEP’s investment plan. We think that environmental regulations, aging infrastructure, accelerating energy demand, and new gas and renewable generation support a long-term runway for transmission growth.

AEP plans to invest in new natural gas generation, for which it has secured turbines, and in renewable energy across its subsidiaries.

We expect AEP to narrow the gap between earned and allowed returns gradually. This will require constructive regulatory and legislative outcomes across its subsidiaries.

AEP is managing numerous strategic initiatives. AEP recently sold its commercial renewable energy portfolio and is now selling its retail and distributed resources business. It also recently sold a 19.9% interest in Ohio and Indiana & Michigan Transmission Companies, with proceeds to be used to reduce equity needs and support capital investment.

Read more about American Electric Power here.

WEC Energy Group

• Morningstar Price/Fair Value: 0.91
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 3.62%
• Industry: Utilities—Regulated Electric

WEC Energy Group’s electric and gas utility businesses serve electric and gas customers in Illinois, Michigan, Minnesota, and Wisconsin service territories. The firm earns a narrow economic moat rating, and the shares of its stock look 9% undervalued relative to our $116 fair value estimate.

WEC Energy Group is the largest Midwest utility, with $34 billion of rate base from mostly regulated operations.

Most of WEC’s earnings come from areas with what we view as constructive regulation, such as Wisconsin and the Federal Energy Regulatory Commission. Its commercial renewable energy business accounts for the remainder of earnings, with limited risk and regulated-like returns.

We expect the company to invest $37.5 billion through 2030, which includes its investment in American Transmission. This investment plan supports our forecast that the company will be at the high end of management’s 7%-8% annual earnings growth target.

In Wisconsin, the company enjoys rates based on two-year forward test years and a ratemaking that allows it to share with customers any earnings above its allowed return on equity. We expect a constructive outcome in WEC Energy’s current rate case, consistent with historical precendent.

Achieving a constructive outcome in the company’s Wisconsin rate case was key to regaining investors’ trust in the state’s regulatory environment. Regulators maintained the company’s 9.8% allowed ROE and signaled support for the significant investment needs across its service area. We expect constructive regulation to continue with the company’s current rate case filing.

We expect the regulatory environment to remain challenging in Illinois, which represents 14% of WEC’s rate base and a lower share of earnings. The firm has directed capital from Illinois toward more attractive investment opportunities elsewhere, resulting in the company’s Illinois rate base shrinking to 10% of its total by 2030.

The company’s capital investment plan encompasses a mix of generation technologies that support its growing electricity demand. WEC will invest in natural gas, solar, battery storage, and wind generation development through 2030.

The company’s capital investment program is expected to support accelerating electricity demand. New demand is anticipated to come from economic development in southeastern Wisconsin, particularly new data centers. An additional data center campus north of Milwaukee should contribute to demand growth.

Read more about WEC Energy Group here.

CenterPoint Energy

• Morningstar Price/Fair Value: 0.91
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 2.45%
• Industry: Utilities—Regulated Electric

CenterPoint Energy owns a portfolio of businesses. CenterPoint Energy is an affordable utilities stock, trading at a 9% discount to our fair value estimate of $43 per share. The regulated electric company earns a narrow economic moat rating.

CenterPoint Energy’s regulated utilities have significant growth investment opportunities. We expect the company to invest $36 billion over the next five years, supporting our assumption that management can achieve the high end of its 7%-9% annual earnings growth target.

Management’s $67 billion-plus, 10-year capital investment plan highlights the utility’s long runway of growth opportunities, excluding $10 billion in incremental capital. New investments will address above-average customer growth in Houston, transmission needs, system reliability and resiliency, gas distribution safety, and system modernization.

At CenterPoint’s most important subsidiary, Houston Electric, stakeholder relations were strained but have improved significantly. Nearly two-thirds of CenterPoint’s business is in Texas, where 2% annual customer growth is among the highest of its utilities peers. Historically, regulation has been constructive in the region.

CenterPoint has received regulatory clarity at utilities representing most of its rate base. We think management has done a good job of achieving constructive outcomes across its service territory, particularly in Houston. This increases the likelihood of achieving the company’s near-term earnings growth.

Shareholders have benefited from management’s portfolio rotation. CenterPoint exited its partial ownership stake in Enable Midstream Partners and used the proceeds to reduce leverage. CenterPoint also sold its natural gas distribution utilities in Oklahoma, Arkansas, Louisiana, and Mississippi at attractive prices.

Management plans to divest its Ohio gas distribution utility for $2.4 billion, and use proceeds to support growth in Texas. We believe reallocating capital to areas with more attractive growth and regulatory support is beneficial for shareholders. These actions have shored up the company’s balance sheet and provided an efficient source of funding for its capital investment plan.

Read more about CenterPoint Energy here.

Duke Energy

• Morningstar Price/Fair Value: 0.91
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 3.63%
• Industry: Utilities—Regulated Electric

Regulated electric company Duke Energy rounds out our list of best utilities stocks to buy. Duke Energy is one of the largest US utilities, with subsidiaries in the Carolinas, Indiana, Florida, Ohio, and Kentucky that deliver electricity to more than 8 million customers. The stock is 9% undervalued relative to our fair value estimate of $131 per share.

Duke Energy is one of the largest utilities in the United States. It has significant regulatory clarity across its numerous subsidiaries, with the majority of investment recovered through customer ratemaking mechanisms that significantly reduce regulatory lag.

Florida is Duke’s most constructive and attractive jurisdiction, with higher-than-average growth and best-in-class regulation that allows for higher-than-average returns on equity, forward-looking rates, and automatic base-rate adjustments.

In North Carolina, Duke’s largest service territory, the outlook has improved significantly. Legislation allows for multiyear rate plans, including rate increases for projected capital investments. State legislation allows for performance incentive mechanisms, usage-decoupled rates for residential customers, and supports utilities’ investments. Proposed settlements support our view that regulation will remain constructive.

Indiana also historically has been constructive. Duke’s subsidiary in the state is allowed to use forward test years and above-average return on equity to set rates. Regulators support Duke’s investments in new natural gas generation, renewable energy, and battery storage.

Residential and commercial customer electricity demand growth remains a significant tailwind for Duke. Annual customer demand growth remains over 2% at its Carolinas and Florida subsidiaries. Data center demand is expected to grow to more than 10% of commercial load by 2030.

Duke’s current 1.5%-2% annual growth in electricity demand accelerates to 3%-4% by 2027 in their forecast, supporting additional capital investment and growth. Indiana and the Carolinas are well-positioned to capture data center demand.

We expect Duke to invest more than $103 billion through 2030, in line with management’s updated plan and supporting our expectations for earnings growth at the high end of management’s 5%-7% annual earnings growth range. This excludes $5 billion-$10 billion of capital investment opportunities to serve large loads in Florida and Indiana.

Read more about Duke Energy here.

How to Find More of the Best Utilities Stocks to Buy

Investors who’d like to extend their search for top utilities stocks can do the following:

• Review Morningstar’s comprehensive list of utilities stocks to investigate further.
• Stay up to date on the utilities sector’s performance, key earnings reports, and more with Morningstar’s utilities sector page.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of utilities stocks to research and watch.