US Utilities Sector Report: Q3 2025
Why the utilities sector is outperforming amid economic pressures
Utilities are maintaining their defensive position amidst ongoing economic and market challenges. Despite high interest rates and inflationary pressures, the sector is experiencing a surge in capital investment, with 2025 marking one of the largest year-over-year increases since 2017.
What are the main value drivers for the US utilities sector?
This growth is driven by rising electricity demand, data center expansion, and a continued focus on renewable energy infrastructure. The US utilities sector continues to outperform most markets, with the Morningstar US Utilities Index up 19% in 2025 and 71% since October 2023, despite multidecade-high interest rates. Utilities are trading at a premium with low dividend yields that still attract investors, but rising energy costs may lead to regulatory limits on rate hikes, potentially slowing earnings growth.
Download our Q3 2025 US Utilities Sector Report for a deeper look at top utility picks, key regulatory developments, and long-term investment strategies.
