Summer Market Sell-Off Could Be Coming - Buy High-Yield Utility Stocks As Power Demand Soars

Investing

Published: June 8, 2025 4:01 pm

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The rally off the April lows has been spectacular, and most of the losses from the most significant sell-off in a few years have been recovered. However, there is a growing sense on Wall Street that we could be in store for a summer sell-off as traders take some of the enormous gains from the recovery rally. While some acknowledge that the path of least resistance for the stock market could still be higher, a growing number of technical and fundamental analysts are suggesting investors take a cautious approach during the summer, as the major indexes close in on the highs posted back in February.

24/7 Wall St. Key Points:

The President is asking for rate cuts, but with recent solid economic data, a cut before the fall is unlikely
Many on Wall Street will be closely watching second-quarter results for the effects of the tariffs
Utility stocks and the demand for more power have driven the sector to the highest levels in years
Are utility stocks a good fit for you? Why not meet with a financial advisor near you soon for a complete portfolio review? Click here and get started today. (Sponsored)

Due to their continuous operations, data centers consume electricity constantly. These operations involve running large numbers of servers, cooling systems, networking equipment, and other infrastructure. The amount of electricity used by data centers varies widely based on size, capacity, efficiency, and geographic location, but demand is always present.

The numbers are staggering, as Data centers collectively account for a notable portion of global electricity usage. Estimates suggest that data centers worldwide consumed approximately 200 terawatt-hours (TWh) of electricity in 2020, accounting for around 1% of global electricity demand. Experts think that the figure has increased dramatically since then.

We decided to screen our 24/7 Wall Street utility stock database, looking for the highest-yielding stocks that could benefit from this massive increase in electricity use. All offer stable and dependable passive income and are rated Buy by top Wall Street firms. Lastly, all of the companies are good places to be, should we indeed see a summer sell-off.

Why are we covering utility stocks?

The S&P 500 utilities sector has gained nearly 19% from its low in mid-February and has outperformed the large-cap benchmark index by 3%. Equities will be impacted if the major stock market indices experience a significant decline this summer and try to retest their previous lows for the year. However, history shows that stodgy utility stocks are likely to hold their ground much better than high-flying technology stocks, especially those chasing the Artificial Intelligence mania.

With a product always in demand and the summer heat already upon us, high-yielding utilities may be the best idea now for investors concerned about a market low re-test.

Canadian Utilities Limited

Canadian Utilities is an ATCO company with approximately 5,000 employees and assets of $22 billion. With a strong dividend and residing in a highly safe sector, this company is a steal at its current trading levels and is one of the Dividend Kings. Canadian Utilities Limited (OTC: CDUAF) together with its subsidiaries, engages in the electricity, natural gas, renewables, pipelines, liquids, and retail energy businesses in Canada, Australia, and internationally.

It operates through three segments:

ATCO Energy Systems
ATCO EnPower,
Corporate & Other segments

The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in:

Northern and central east Alberta,
The Yukon
The Northwest Territories
The Lloydminster area of Saskatchewan

This segment also provides integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility near Fort Saskatchewan, Alberta, in Canada.

The ATCO EnPower segment provides:

Hydro
Solar,
Wind
Natural gas electricity generation
Natural gas storage
Industrial water solutions
Clean fuels, including hydrogen, carbon capture, and underground storage projects; and related infrastructure development in Alberta, the Yukon; the Northwest Territories, Australia, Ontario, Mexico, and Chile

The Corporate & Other segment retails electricity and natural gas, and provides whole-home solutions.

Dominion Energy

Dominion Energy is an integrated energy utility. It offers electricity, natural gas, and related services. Many of the Wall Street firms we cover remain very positive about this company, which pays a strong dividend and provides services in a fast-growing area of the country.

Dominion Energy, Inc. (NYSE: D) operates through four segments:

Dominion Energy Virginia,
Gas Distribution,
Dominion Energy South Carolina, and
Contracted Assets.

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in

Regulated natural gas gathering
Transportation
Distribution and sales activities
Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment:

Generates
Transmits
Distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.

The company’s portfolio of assets included approximately:

30.2 gigawatts of electric generating capacity
10,500 miles of electric transmission lines
85,600 miles of electric distribution lines
94,200 miles of gas distribution lines
Dominion serves approximately 7 million customers.

Duke Energy

Duke Energy Corporation is an American electric power and natural gas holding company headquartered in Charlotte, North Carolina. This is another excellent idea, now that it is located in a growing part of the country and pays a substantial dividend. Duke Energy Corporation (NYSE: DUK) and its subsidiaries operate as energy companies in the United States.

It operates through two segments:

Electric Utilities and Infrastructure (EU&I)
Gas Utilities and Infrastructure (GU&I).

The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest.

To develop electricity, Duke Energy uses the following:

Coal
Hydroelectric
Natural gas
Oil
Solar and wind sources
Renewables
Nuclear fuel

This segment also sells electricity to municipalities, electric cooperative utilities, and load-serving entities.

The GU&I segment distributes natural gas to

Residential
Commercial
Industrial
Power generation natural gas customers

The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.

Entergy

Entergy Corporation is an energy company engaged primarily in electric power production and retail distribution operations in the Deep South of the United States. This top utility stock always makes sense for conservative investors and pays a rich dividend. Together with its subsidiaries, Entergy Corporation (NYSE: ETR) produces and distributes electricity in the United States.

It operates in two segments,

Utility
Entergy Wholesale Commodities.

The Utility segment generates, transmits, distributes, and sells electric power in portions of:

Arkansas,
Louisiana,
Mississippi, and
Texas
City of New Orleans

The company also distributes natural gas.

The Entergy Wholesale Commodities segment is involved in:

The ownership, operation, and decommissioning of nuclear power plants located in the northern United States
Sale of electric power to wholesale customers
Provision of services to other nuclear power plant owners
Ownership of interests in non-nuclear power plants that sell electric power to wholesale customers

The company generates electricity from various sources, including gas, nuclear, coal, hydro, and solar. It sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies.

Its power plants have approximately 24,000 megawatts (MW) of electric generating capacity, which includes 5,000 MW of nuclear power.

The company delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.

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