Utilities have always had a reputation for being a "sleepy" corner of the stock market. Steady, predictable dividend payers one bought late in the bull market to preserve a portfolio. Naturally, this classification has not been attractive in one of the strongest bull markets in history that saw numerous tech-driven growth stocks dominate the market.
Yet, 2025 has turned the stereotype on its head, with the sector returning over 15% year-to-date and outpacing the S&P 500 itself. On the surface, some of that strength still stems from the familiar "defensive" appeal—when markets become volatile, investors allocate money to companies that sell essential goods, such as electricity, water, and gas.
