10 Under-the-Radar Utility Stocks with Incredible Growth Potential

Utility stocks were once called "widows and orphans" stocks because they were considered so safe and boring

That image isn't far from the view today, noting that utilities are generally looked at as reliable dividend stocks

But things could be to change thanks to a step change in demand for electricity

Here are 10 utility stocks that present under-the-radar opportunities thanks to the growth the utility sector is to see

Image source: Getty Images

What's behind the change in the utility sector

Before getting into the list of 10 utilities that you might want to look at today, it is important to understand the key underlying trends in the sector

This should drive growth for utilities across the country, and for some companies that duce electricity but that aren't actually utilities

Here are 10 companies to start you off if you want to take advantage of the long-term growth potential on offer from the utility sector

However, if you aren't inclined to try to pick stocks, it gets you exposure to the utility sector quickly, easily, and in a diversified manner

Since the entire utility sector should benefit from the demand trends, Vanguard Utilities Index Fund ETF is a good punt option

The yield is currently around 2

That's largely driven by the fact that NextEra Energy also owns a that operates solar and wind power assets, which are not regulated

This vides investors with a solid foundation and a growth platform all in one investment

The yield is currently around 3

The big story here is the recent start up of two nu reactors, which will vide the utility with reliable clean energy to sell for decades to come

The construction of those power plants was over budget and delayed

But now that they are up and running Southern Company's outlook is far less cloudy and it is positioned to supply power without the negative of ducing greenhouse gases

The goal was to focus on the far more reliable demand that comes from regulated utility customer bases

This demand is set to see increased growth thanks to things AI, data centers, and EVs

The big benefit for investors is that the ups and downs of Wall Street aren't really a factor for Duke Energy's plans once regulators apve its capital spending and rates

The dividend yield is around 3

That's because, Duke, it has been trimming its, which is now largely focused on regulated electric assets

But along the way there was a dividend cut and right now the dividend is stuck in neutral until Dominion's balance sheet is in better shape

It's worth a look for more aggressive investors

That makes it one of the few utilities to have achieved Dividend King

Notably the utility's customer base is growing at nearly twice the rate of the broader U

Constellation Energy Corporation Constellation Energy (CEG 2. 15%) isn't a regulated utility, instead selling power "competitively. " The big story here, however, is that the company operates the largest nu power fleet in the United States

There's more downside risk here, since customers can cancel their contracts (which they can't really do within a regulated supplier relationship), but there's more upside, too, since increasing demand could lead to increasing power prices

Include the big position in nu power, which is ly to help sate the huge demand from AI, and it looks Constellation could be a growth story poised to take off

This is basically a one-stop shop for investors, given that its portfolio spans across hydroelectric, solar, wind, battery storage, and nu

And it owns assets the world over, so the opportunity for growth goes well beyond just the U

The company recently signed a decade-long deal to vide Microsoft with clean power for data centers

The two classes represent the same entity, the difference in yield is driven by higher demand for the corporate class of s

This is an attractive investment, but it's a bit complex

On the risk front, it operates on the West Coast, where wildfires have been an concern

That said, on the positive side, its service area includes a key landing for international subsea communications cables

That puts Portland General Electric in a prime location for data centers and nology companies, noting that its service area includes the so-called "silicon forest" region

What's interesting here is that the company doesn't own power generation assets, it only distributes power on a local and interstate level

It passes the cost of power directly on to the customer, with its earnings largely derived from fees for the use of its transmission assets

Regulatory rate increases and new customer growth are the key stories here, with exposure to water and natural gas helping to vide a diversified foundation

The dividend yield is roughly 4

Plenty of opportunity ahead for utilities to grow What's exciting the trends driving demand for electricity is that they aren't going to play out in a year or two

They are expected to last decades, viding an opportunity for buy and hold investors to build material long-term wealth as the demand growth story plays out

The above 10 investments are a diversified collection of stocks (and one ETF) that you might want to look into now as the demand growth trends are just starting to pick up their pace

Reuben Gregg Brewer has positions in Black Hills, Brookfield Renewable Partners, Dominion Energy, and Southern Company

The Motley Fool has positions in and recommends Constellation Energy, Microsoft, and NextEra Energy

The Motley Fool has a disclosure policy.