We recently released a list 10 Most Profitable Utilities Stocks Buy Now. In this article, we will take a look at other most profitable utility stocks that York Water (NASDAQ:YORW) buys immediately.
Utilities provide basic utilities such as water, gas and electricity. Even during a recession, demand for these stock services is generally stable, making them defensive investments.
Morningstar Energy and Utilities strategists Travis Miller and Andrew Bischof saw reasons for investing in utilities, noting that utility stocks remained strong for the previous year despite a surge in 2024 as interest rates began to rise. As of mid-February, most U.S. utilities trade in estimates of their fair value.
Utilities often generate substantial dividends, which seem expensive at the moment. Miller & Bischof says:
“Utilities continue to grow at an impressive rate. Almost all utilities have announced dividend increases in 2025, or are expected to announce increases in the first quarter. We expect dividends to rise by 5% in 2025.”
Utilities stocks have become unexpected market leaders, outperforming the technology sector only with a total return of more than 17%, according to JP Morgan's 2024 report. The adoption of AI, the growth of data centers, the spread of electric vehicles, and the outsourcing of manufacturing were the main drivers of the rally, which helped by the rapid transfer of electricity demand. Data centers alone already account for 4.5% of U.S. electricity usage, and the data center is expected to rise to nearly 8% by 2030 after two decades of demand stagnation. Given the increasing number of extreme weather events, the U.S. power grid is mostly over a century old and is not ready to deal with this surge, and requires substantial investment in capacity, stability, and resilience. Businesses engaged in storage, grid upgrades and generations will benefit from this transformation. The industry is trading at 18.7 times the expected earnings, 13% less than the broader market, indicating that it will continue to be valuable even after recovery. If interest rates drop, utility dividend yields may be more attractive, which could lead to more growth. Utilities provide strong alternatives for investors looking to gain AI-related infrastructure expansion without following technical prices and are supported by actual demand and structural investment requirements.
Throughout the historical period, the broader market utilities sector has performed well. The return rate at the beginning of the year was 3.61%. Last year, the industry's return rate was 17.65%. When considering longer periods, the annual rate of return for the first three years was 1.86% and the fifth year was 6.13%. The annual profit for 10 years is 5.68%, slightly lower. Compared with the overall market, the utility sector has a stable growth, with a larger short-term growth, but has higher long-term returns, showing its defensiveness and stability during periods of fluctuation. What is worth noting is the flexibility of performance in 5 years.
Utilities inventory may be safer than other sectors, but they are still prone to stop spending in thirst data centers. Utilities stocks have long been suddenly uncertain as artificial intelligence changes electricity demand. According to Andrew Weisel of Scotiabank, “Power is a very basic demand for most people and most companies”, highlighting the long-term resilience of the industry. However, as U.S. consumption dominated the world, it is expected that by 2030, according to the IEA, there will be more than 1,000 TWH per year, so this stability is increasingly connecting with AI-powered data centers. AI capital expenditures slowed, such as Bill Gates owned by a giant tech company (Bill Gates) that reduced some plans, so the risk of earnings increased. Weisel warned that “investors will be skeptical”, while Bloomberg Intelligence’s Nikki Hsu pointed out that during the recession, “regulators will reject requests for interest rates.”
The sunrise reservoir reflects the commitment of regulated water companies to provide reliable water services.
For this list, we screened utility companies with net profit margins of more than 10%, which demonstrates reasonable financial position and excellent cost management. As of the most recent quarter, these stocks were ranked in order of rising net profit margins.
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Net profit margin: 27.11%
York Water Corporation (NASDAQ: YORW) is a U.S.-based utility. An important advantage of a utility company is the consistency of its operating cash flow. Its government can predict cash flows and expenses in advance, as demand for water and wastewater services is largely constant. Due to this financial certainty, the company is able to seek strategic acquisitions to improve its long-term cash flow and profitability. Its net profit margin rose 27.11%. So, it is Best utilities.
York Water (NASDAQ:YORW) reported revenue in the fourth quarter of 2024 was $18.8 million, compared with 4.2% in the same period last year. However, the company's net income fell from $6 million in age to $5.1 million during the period. In addition to the acquisition, it will invest about $46 million in 2025 and $48.5 million in 2026 to fund large expansions, the company said. The company spent $48.2 million over the year, including building wastewater treatment plants, repairing and strengthening spillways at the Williams Lake Dam, and performing regular maintenance and infrastructure upgrades. It also spent $783,000 on two wastewater systems and four water supply systems.
York Water (NASDAQ:YORW)’s stable dividend history is another element that contributes to its investment appeal. Since its inception in 1816, the publicly traded company has been paying dividends continuously every year. In addition, the business has increased its quarterly dividend for 28 consecutive years.
Overall, John Ranked third Among the 10 most profitable utility stocks we buy now. Although we acknowledge the potential of utility companies, our belief lies in the belief that AI stocks offer higher returns over a shorter time frame and do so during this period. AI stocks have risen since the beginning of 2025, while popular AI stocks have lost about 25%. If you are looking for AI stocks that are more promising than Yorw but have less than 5 times its earnings, check out our report The cheapest AI stock.
Read the next article: Buy 20 Best AI Stocks Now and According to the billionaire, there are now 30 best stocks.
Disclosure: None. This article was originally published in Internal monkey.