Previously, we reported that erstwhile high-flying nuclear energy stocks have crashed spectacularly, with the harsh reality of the long lead and construction times of nuclear facilities, coupled with the fact that some stocks in the space with zero revenues are in nosebleed territory, sending the sector into a tailspin. However, the nuclear sector is in good company: the entire U.S. stock market has lately been pulling back, with tech stocks selling off and the AI-driven boom running out of steam.
That said, one corner of the energy universe is still showing resilience: utilities. The Utility sector has been the third best-performer in the current year, returning 16.3% in the year-to-date compared to 12.9% by the S&P 500 and 4.4% by Oil & Gas stocks.
Utilities provide electricity, natural gas, and water and wastewater services to residential, commercial, industrial, and government customers. The sector tends to perform relatively well when concerns about slowing economic growth resurface, and to underperform when those worries fade. That’s partly the case because of the sector’s traditional defensive nature and steady revenues–after all, people need water, gas and electric services during all phases of the business cycle including during recessions. Further, low interest rates typical of weak economic cycles provide cheap funding for the large capital expenditures required by this industry.
Here are 5 utility stocks that have easily outperformed the market.
#1. NRG Energy
Market Cap: $32.4B
YTD Returns: 85.0%
NRG Energy (NYSE:NRG) produces and sells electricity and natural gas to millions of residential, commercial, and industrial customers across North America. The company offers energy solutions and related products and services, including smart home and energy management tools, and operates through a portfolio of brands like NRG, Reliant, and Green Mountain Energy.
Related: Asia-Pacific Is Leading the Global Floating Solar Panel Boom
NRG stock is performing well due to a combination of strong Q3 2025 earnings, which beat analyst expectations, and the company’s strategic focus on growth areas like data center power and residential services. The company’s recent positive performance, improved earnings estimates, and new share repurchase plan are further supporting the stock’s bullish trend.
#2. Constellation Energy Corp.
Market Cap: $111.6B
YTD Returns: 60.4%
Constellation Energy Corp. (NYSE:CEG) is the largest owner and operator of nuclear power plants in the United States, producing large-scale, carbon-free electricity that provides a consistent and reliable power source. The company also provides clean energy to both regulated and non-regulated customers and works to secure long-term contracts for its power.
CEG stock has been outperforming thanks to the company’s position in the growing carbon-free energy market, strong performance in nuclear and renewables, and recent favorable developments like a significant federal loan and a pending acquisition of Calpine. Wall Street is bullish about the company’s growth prospects, driven by increasing demand for clean power from residential, business, and especially the booming data center and AI sectors.
#3. Clearway Energy
Market Cap: $7.2B
YTD Returns: 38.5%
Clearway Energy (NYSE:CWEN) owns, develops and operates clean energy projects, including wind, solar, and battery storage systems across the United States. It is a leading independent power producer with a large portfolio of clean energy assets and also owns conventional power capacity to ensure grid reliability. Clearway aims to provide investors with stable and growing dividend income through its contracted clean energy portfolio.
The stock has been benefiting from a combination of a strong project pipeline, consistent dividend growth, and a strong focus on renewable energy. The company also benefits from long-term contracts and is well-positioned in the growing renewable energy sector, which includes solar, wind, and battery storage projects. With a generous 5.0% yield, CWEN is supported by a robust dividend with a history of increases, which attracts income-oriented investors.
#4. American Electric Power Company
Market Cap: $65.0B
YTD Returns: 32.3%
American Electric Power (NASDAQ:AEP) generates, transmits, and distributes electricity for customers in 11 states. AEP is a large, vertically integrated utility holding company that operates a diverse portfolio of generating facilities, manages the nation’s largest electric transmission system, and maintains a vast distribution network to deliver power to homes and businesses. It also offers competitive energy solutions and engages in wholesale energy trading.
After a long period of underperformance, AEP stock has come alive thanks to robust demand for electricity, driven by data centers and industrial growth, which is supported by a robust capital plan. The company’s strong performance is also reflected in positive momentum, with significant growth in EPS and EBITDA, and a solid dividend at 3.1%.
#5. Atmos Energy
Market Cap: $28.1B
YTD Returns: 26.0%
Atmos Energy (NYSE:ATO) is a natural gas-only distributor that safely delivers natural gas to millions of residential, commercial, and industrial customers. The company’s main activities include the transmission, distribution, and storage of natural gas, as well as purchasing it from producers and marketers to meet customer demand. Atmos Energy operates in over 1,400 communities across eight states in the United States.
This company has been showing consistent earnings growth, significant investment in infrastructure for safety and reliability, a strong financial position with lower-than-average debt, and a history of increasing dividends. Atmos’ stable, regulated business model, expanding customer base, and strategic capital expenditures have all been contributing to its strong performance.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com
Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you’ll always know why the market is moving before everyone else.
You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions – and we’ll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.
Leave a Comment
Your email address will not be published. Required fields are marked *