Investing in Utility Stocks

Utility companies are responsible for providing households and businesses with electricity, gas, water, waste disposal and other necessary services in the modern world. Whilst investing in utilities may not be considered as exciting as other industries such as technology, utility stocks can play a role as part of a diversified portfolio. 

In this article, we will look at why someone might want to invest in utilities companies, highlight 3 of the top utility stocks to watch and much more!

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

Investing in Utility Companies

Utility companies provide us with services which we use every day. We pay for these services almost without thinking about it as, to be without them, is almost unthinkable in the modern world. 

Therefore, people tend to prioritise utility bills over the majority of other expenses. This means that the providers of these utilities can typically rely on consistent demand throughout the economic cycle. However, this doesn’t mean that they are immune to economic downturns. 

Besides their defensive qualities, many utility stocks distribute dividends, making them popular with income investors. However, as is the case with all dividend stocks, future payouts are never guaranteed.

Top Utility Stocks

In the following section, we’ll take a look at three top utility stocks from around the world. 

United Utilities

United Utilities is the largest listed water supplier in the UK which provides water and wastewater services to millions of customers across the North West of England.  

Water is a utility which people always need, whether for drinking or washing, and which they will always try to find room in their budget to pay for. 

In the six months ended 30 September 2025, revenue at United Utilities climbed 21% to £1.3 billion. Operating profit followed suit, jumping 68% to £561.5 million. Past performance is not a reliable indicator of future results. 

The utility company is also a dividend payer, which has raised its annual dividend each year for the past 14 years, although future payouts are never guaranteed.  

At the time of writing, 10 December 2025, the water company has a dividend yield of 4.4%, significantly higher than the wider FTSE 100’s 3.1%. 

Iberdrola

Iberdrola is a Spanish utility company which generates, transmits and distributes electricity and also supplies gas. It provides utilities to almost 100 million people around the globe and is one of the world’s largest electric utility companies in terms of market capitalisation. 

Iberdrola is a global leader in renewable energy. It generates the majority of its electricity from renewable sources - including wind, hydro and solar - and has more than 45 MW of operational renewable capacity. 

In the first nine months of 2025, Iberdrola generated €33.9 billion, an increase of 2% from the previous year. However, higher costs led to operating profit falling 10% to €8.2 billion. Past performance is not a reliable indicator of future results. 

Iberdrola has hiked its annual dividend every year for the last 11 years and the utility stock has a dividend yield of 3.6%, although future payouts are never guaranteed. 

Duke Energy

Duke Energy is one of the largest electric and gas utilities in the US, serving millions of customers across a number of US states, including the Carolinas, Kentucky and Florida. 

Its electric operations span generation, transmission, distribution, whilst it also transmits and supplies gas. At present, as part of its energy transition, Duke is investing heavily in major upgrades to its electric grid and clean energy projects. Such investments could help grow future earnings, although that’s by no means guaranteed. 

In the nine months ended 30 September 2025, Duke generated $24.3 billion in revenue, an increase of 6% year on year; operating income rose 12% to $6.5 billion in the same period. Past performance is not a reliable indicator of future results. 

Duke has a fairly impressive track record when it comes to paying dividends, having paid a quarterly cash dividend for the last 99 years. At the time of writing, its dividend yield was 3.6%. 

Utilities ETF

For those who want exposure to the utilities sector, but are not interested in picking individual stocks, an alternative might be to look for a utilities ETF (Exchange-Traded Fund). 

Utilities ETFs use investor funds to buy shares in utility companies, providing shareholders with exposure to a variety of companies with a single investment. 

An example of such an ETF is the iShares STOXX Europe 600 Utilities UCITS ETF, which tracks an index composed of companies from the European utilities sector.

The ETF has a total expense ratio of 0.46% and a dividend yield of 3%, at the time of writing. Although bear in mind that dividend yields may fluctuate and payouts are not guaranteed. 

Its top five holdings are: 

• Iberdrola
• Enel
• National Grid
• Engie
• E.ON

Source: iShares STOXX Europe 600 Utilities UCITS ETF – Top Holdings. Date Captured: 8 December 2025. 

How to Invest in Utility Stocks

• Open an investing account with a broker, such as Admirals and complete the onboarding process. 
• Log into to your account and open the trading platform. 
• Search for the desired stock and open the instrument page. 
• Enter the number of shares to purchase, as well as stop loss and take profit levels, and send your order to the market! 

Other Articles You Might Be Interested In:

• Investing in FTSE 250 Shares
• Investing in UK REITs
• The Biggest Companies in Europe

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