In a market gripped by uncertainty, utility stocks are quietly reclaiming the spotlight. Known for their slow, steady growth and dependable dividends, utilities have long been a haven for cautious investors. In 2025, that defensive appeal is back in vogue. 

These companies offer more than just essential services like electricity, water, and gas – they are becoming critical players in the age of artificial intelligence. As AI drives up energy demand through sprawling data centers, utilities are powering the backbone of the digital world. 

Against this backdrop, two names - NRG Energy (NRG), a leading U.S. power provider, and Companhia de Saneamento Básico do Estado de São Paulo (SBS), Brazil’s top water utility – are shining brighter. As the stocks each offer more than 10% upside, they are compelling bets for investors seeking stability with growth.

Utility Stock #1: NRG Energy

NRG Energy (NRG) is a utility giant that generates and supplies electricity, powering over 7.5 million homes and businesses across the U.S. and Canada. It boasts a market cap of $22 billion.

With a diverse mix of coal (LUK25), natural gas (NGM25), crude oil (CBN25), wind, nuclear, and solar energy, NRG blends legacy energy with forward-thinking solutions. 

Often overshadowed by flashier peers, NRG didn’t steal headlines last year, but it quietly outpaced the crowd. This utility stock has surged 55% over the past year, and in 2025, it is up 26.7%. 

NRG dropped its Q4 earnings report on Feb. 26, smashing expectations. While revenue amounted to $6.8 billion, adjusted EPS stood at $1.52, surpassing Wall Street’s estimates by 60%. Adjusted EBITDA climbed to $902 million, up nearly 5% year-over-year. 

On March 12, NRG Energy made a bold move, securing six power plants from Rockland Capital for $560 million. The deal adds 738 MW of flexible, gas-fired capacity, boosting NRG’s Texas stronghold just as demand surges from data centers, electrification, and growth. At $760 per kW, it’s a bargain below new build costs. 

NRG is charting a steady course through 2025. Management expects adjusted EPS between $6.75 and $7.75, with net income projected to land between $1.33 billion and $1.53 billion. FCF before growth could hit between $1.975 billion and $2.225 billion, backed by strong EBITDA guidance, expected to land somewhere between $3.725 billion and $3.975 billion.

Overall, NRG has a solid “Moderate Buy” consensus rating, reflecting analysts’ bullishness on the stock. Out of the 10 analysts in coverage, seven recommend a “Strong Buy,” and the remaining three are playing it safe with a “Hold” rating.

The utility stock’s mean price target of $127.22 suggests that it could rally as much as 12% from current prices. The Street-high of $165 implies potential upside of 46%.

Utility Stock #2: SABESP

SABESP (SBS), Brazil’s sanitation titan, has been the lifeline of São Paulo since 1954. The utility company has a market cap of $13.9 billion, serving over 28 million people with clean water and sewage services. With 47.4 billion Brazilian reais  in planned investments through 2028, it’s digging deeper into infrastructure, streamlining operations, and expanding access. 

SBS has quietly powered up over the years, returning over 838% over the past two decades. The Brazilian utility stock surged 30% over the past 52 weeks and caught real momentum in 2025, climbing 42%. Recently hitting an all-time high of $20.62, the stock is proving that even steady utilities can spark a breakout when the current flows just right.

On March 24, SABESP’s fiscal Q4 earnings results sparked a wave of optimism on Wall Street, as the stock surged over 3.7% in the subsequent trading session. Net revenue hit 7.8 billion reais, marking 7.9% year-over-year growth. Key drivers included a 5.8% rise in sanitation revenue and a 14.2% boost in construction revenue.

Adjusted EBITDA grew 4.1% annually to 3 billion reais, with a solid margin of 54%. Adjusted net income soared 64%, reaching 1.9 billion reais, while EPS climbed to 2.10 reais.

Looking ahead, SABESP has ambitious plans to double its asset base by 2029, aligning its new compensation model with goals for universal water and sewage services. With growth prospects tied to privatization, infrastructure investments, and regulatory reforms, SABESP is well-positioned for continued success in the evolving utility sector.

Analysts predict SABESP’s EPS to be $1.29 in 2025, with the bottom line projected to surge by 47.3% to $1.90 per share in 2026.

SBS has a unanimous “Strong Buy” rating from all three analysts covering the stock. The mean price target of $23.75 suggests that the utility stock has upside potential of 19%. The Street-high target of $24.50 implies that SBS could rally as much as 22.5%.