Utility Stocks Outperform Despite Market Challenges

ARLINGTON, Va. — Utility stocks are proving resilient, with numerous companies reporting strong second-quarter earnings. Notably, Atmos Energy Corp. has emerged as a leader in this sector, suggesting a promising outlook for the coming years, according to Roger Conrad, editor of Kiplinger's investment newsletter.

As of 2025, the overall return for utility stocks within portfolios has reached 13.4%, significantly outperforming the S&P 500 Index, which has been impacted by the tech sector. “The best-in-class utilities are not just thriving; they are poised for even greater growth,” Conrad shared.

Despite fluctuations in the market, utilities are considered low-risk investments, especially in regulated sectors like power and natural gas. Earlier decades were marked by delayed cost recovery for utilities, but today’s pre-approved capital expenditures allow for quicker project completions and near-term earnings stability.

Atmos Energy (ATO), which recently updated its earnings guidance for the fiscal year, is among the standout performers. Recent assessments show its ability to adapt and thrive in a competitive environment. Investors should be aware, however, that while the company is performing well, the stock currently offers a modest yield of around 2%.

Conrad emphasized the importance of patience and long-term investment strategies for those interested in high-quality dividend stocks. Utilities like Atmos Energy, which serve essential needs and integrate sustainable practices, underscore the sector’s stability. Overall, these companies are set to not just weather uncertain economic times but also deliver continued value to shareholders.