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Investing.com -- Utility stocks have been gaining attention as the sector navigates growth opportunities amid rising energy demands, particularly from data centers.
Wolfe Research has identified top performers in the utility space that are positioning themselves for sustainable growth through strategic investments and operational efficiency.
CenterPoint Energy (NYSE:CNP) leads the pack with an enhanced growth strategy that includes approximately $150 million in annual cash tax savings.
This financial improvement could eliminate roughly half of the company’s $3 billion equity needs over 2028-35 or allow for additional capital expenditures. CNP stands out among 7-9% EPS growth utilities due to its diverse growth drivers, including advanced manufacturing, Port of Houston operations, and Texas medical center expansions.
The company’s near-term profile is de-risked with no rate cases until 2028-29 and satisfied equity needs through 2027.
CenterPoint Energy reported third-quarter 2025 earnings that surpassed EPS expectations at $0.50, though revenue of $1.99 billion fell short of projections.
Entergy (NYSE:ETR) secures the second position with significant upside potential beyond its base plan. The company has disclosed new build combustion turbines and combined cycle combustion turbines through 2032, having secured 19.5 GW of dispatchable generation.
ETR’s impressive growth pipeline includes 7-12 GW from data centers and 3-5 GW from other industries, raising its retail sales growth forecast for 2024-2029 to 7% CAGR. The company maintains relatively low equity needs by using supportive contract terms and alternative financing methods like build-own-transfers.
In recent developments, Entergy announced third-quarter 2025 earnings that beat EPS forecasts at $1.53, while also completing a $1.3 billion offering of junior subordinated debentures and increasing its quarterly dividend by 6.7%.
Alliant Energy (NASDAQ:LNT) ranks third with projected 7-8% EPS growth in 2027-29 and a standout 12% sales CAGR. The company’s current plan includes four data center agreements totaling 3 GW, driving a 50% increase in demand through 2030.
LNT is actively negotiating an additional 2-4 GW of data center load, which would require more generation capacity and create further growth opportunities. The company has already secured gas turbines and safe harbored 100% of its storage and wind projects.
Alliant Energy ’s third-quarter 2025 results missed forecasts, with the company posting an EPS of $1.09 and revenue of $1.21 billion.
NextEra Energy (NYSE:NEE) takes fourth place with its comprehensive "all-of-the-above" energy infrastructure strategy. The company positions itself as a time-to-power solution for data centers through existing assets and new construction capabilities.
NEE reports strong returns on renewables development, with IRRs of 13-20%+ overall and some projects exceeding 20%. The company remains confident about its Florida Power & Light rate case decision and continues to target the top end of its 6-8% EPS CAGR.
NextEra Energy recently reported third-quarter 2025 EPS of $1.13, which surpassed forecasts, although revenue did not meet expectations. Additionally, Evercore ISI raised its price target on the company’s stock.
Sempra (NYSE:SRE) rounds out the top five with a confident 9%+ growth outlook through 2029. The company is awaiting outcomes in several regulatory proceedings, including the Oncor rate case where settlement talks continue.
SRE notes that Oncor’s $36 billion 2025-29 base plan will increase by at least 30% in 2026-30, with another $12 billion of upside potential. The growth is primarily driven by transmission needs, including larger 765 kV lines, with Oncor seeing 30 GW of high-confidence load in its territory.
Sempra reported strong third-quarter 2025 results, beating both EPS and revenue forecasts with an adjusted EPS of $1.11. Following the results, Goldman Sachs upgraded the company’s stock to Buy, citing its focus on Texas operations.
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