We previously reported that once-high-profile nuclear energy stocks have plummeted spectacularly, with the harsh reality of the long preparation and construction times for nuclear facilities, coupled with the fact that some stocks in the zero-revenue space are in bleeding territory, sending the sector into a tailspin. However, the nuclear sector is in good company: the entire US stock market has been retreating lately, with tech stocks selling off and the AI-driven boom losing steam.
That said, one corner of the energy universe still shows resilience: utilities. The utilities sector has been the third best performer in the current year, returning 16.3% so far this year compared to 12.9% last year. S&P 500 and 4.4% for Oil and Gas shares.
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 concerns fade. This is partly due to the traditional defensive nature of the sector and its stable revenues; After all, people need water, gas and electricity services during all phases of the economic cycle, even during recessions. Additionally, the low interest rates typical of weak economic cycles provide cheap financing for the large capital expenditures this industry requires.
Here are 5 utility stocks that have easily outperformed the market.
#1. NRG Energy
Market capitalization: $32.4 billion
YTD profitability: 85.0%
NRG Energy (NYSE:NRG) produces and sells electricity and natural gas to millions of residential, commercial and industrial customers throughout 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 such as NRG, Reliant and Green Mountain Energy.
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NRG stock is performing well due to a combination of strong third-quarter 2025 earnings, which beat analyst expectations, and the company’s strategic focus on growth areas such as data center energy and residential services. The company’s recent positive performance, improved earnings estimates, and new share buyback plan further support the stock’s bullish trend.
#2. Constellation Energy Corp.
Market capitalization: $111.6 billion
YTD profitability: 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 energy source. The company also provides clean energy to regulated and non-regulated customers and works to secure long-term contracts for its energy.
CEG stock has outperformed thanks to the company’s position in the growing carbon-free energy market, strong performance in nuclear and renewable energy, and recent favorable developments such as a significant federal loan and a pending acquisition of Calpine. Wall Street is optimistic about the company’s growth prospects, driven by growing demand for clean energy from the residential, business and, especially, burgeoning data and artificial intelligence centers.
#3. Clearway Energy
Market capitalization: $7.2 billion
YTD profitability: 38.5%
Clearway Energy (NYSE:CWEN) owns, develops and operates clean energy projects, including wind, solar and battery storage systems throughout 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 benefited from a combination of a strong 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 backed by a solid dividend with a history of increases, which appeals to income-oriented investors.
#4. American Electric Power Company
Market capitalization: $65 billion
YTD profitability: 32.3%
American electric power (NASDAQ:AEP) generates, transmits and distributes electricity to customers in 11 states. AEP is a large, vertically integrated utility holding company that operates a diverse portfolio of generation facilities, manages the nation’s largest electric transmission system, and maintains an extensive distribution network to deliver power to homes and businesses. It also offers competitive energy solutions and is engaged in wholesale energy trading.
After a long period of underperformance, AEP stock has come back to life thanks to strong electricity demand, driven by data centers and industrial growth, backed by a strong capital plan. The company’s strong performance is also reflected in positive momentum, with significant growth in EPS and EBITDA, and a strong dividend of 3.1%.
#5. atmospheric energy
Market capitalization: $28.1 billion
Year-to-date profitability: 26.0%
atmospheric energy (NYSE:ATO) is an exclusive natural gas 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 its purchase from producers and marketers to meet customer demand. Atmos Energy operates in more than 1,400 communities across eight U.S. states.
This company has shown consistent earnings growth, significant investment in infrastructure for safety and reliability, a strong financial position with below-average debt, and a history of growing dividends. Atmos’ stable, regulated business model, expanding customer base, and strategic capital expenditures have contributed to its strong performance.
By Alex Kimani for Oilprice.com
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