US utilities outperformed the market for the second year, with the Morningstar US Utilities Index up 70% from its low in October 2023. Valuations are a concern for 2026, but earnings growth remains strong. Expect 6.5% annual earnings growth through 2030 due to clean energy growth and other factors.

Top picks include Edison International and Alliant Energy. Edison faces potential liabilities from the January 2025 Eaton Fire but has access to wildfire funds. Alliant’s capital investment plan and data center demand are driving growth. Portland General Electric’s regulatory environment is improving, with a $6.4 billion investment plan for growth.

Read more at Morningstar: US Utilities: With Stocks Down Since October, the Sector Must Prove It Can Deliver Growth