Investors seek stable utility stocks for reliable dividends and growth potential

Utility stocks are seen as stable investments, providing essential services like electricity and water. They are favored during market downturns due to their consistent demand and reliable dividends, making them a defensive choice for investors. Recent trends indicate that utility companies may benefit from increased power usage driven by artificial intelligence. This potential growth opportunity contrasts with their historically low growth ceilings, as utilities are often limited by geographic constraints and regulated rate increases. To identify strong utility stocks, investors should look for companies within the S&P Composite 1500 that have a long-term earnings growth rate of at least 5%, a dividend yield above 2.5%, and a consensus Buy rating from analysts.