The Grid Can’t Keep Up. These 2 Utility Stocks Are the Buys of the Month.
Utility stocks are often considered slow-growth, defensive plays for turbulent markets. Yet over the past few years, the rapid growth of the power-hungry cloud and AI markets has generated strong tailwinds for companies that help utilities upgrade their power grids. Let’s examine two of those companies — Brookfield Renewable Corporation (NYSE: BEPC) and GE Vernova…
Utility stocks are often considered slow-growth, defensive plays for turbulent markets. Yet over the past few years, the rapid growth of the power-hungry cloud and AI markets has generated strong tailwinds for companies that help utilities upgrade their power grids.
Let’s examine two of those companies — Brookfield Renewable Corporation (NYSE: BEPC) and GE Vernova (NYSE: GEV) — and see why they’re worth buying this month.
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Brookfield Renewable builds hydroelectric dams, wind farms, solar power plants, and other utility-scale green energy projects. It operated 47 GW of renewable operating capacity at the end of 2025, and its pipeline includes over 200 GW of renewable projects in development. It also jointly acquired Westinghouse, one of the world’s top nuclear energy companies, with the uranium miner Cameco(NYSE: CCJ), in 2023. Brookfield owns 51% of Westinghouse, while Cameco owns the remaining 49%.
Brookfield has signed long-term renewable power agreements with hyperscalers like Microsoft and Alphabet’s Google, and it should secure more of those contracts as the cloud and AI markets expand. New decarbonization initiatives will also drive more industries to adopt solar, hydro, and wind power.
Brookfield adds “inflation escalators” to its contracts to raise its prices to keep pace with inflation. In other words, it’s one of the easiest ways to profit from the long-term growth of the green energy market, and it pays an attractive forward dividend yield of 3.8%.
From 2025 to 2028, analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 22% and 6%, respectively. With an enterprise value of $58.4 billion, it still looks cheap at 15 times this year’s adjusted EBITDA.
Brookfield Renewable Corporation shouldn’t be confused with Brookfield Renewable Partners(NYSE: BEP), the older master limited partnership (MLP) which owns the same assets. Investing in the MLP will get you a higher 4.7% forward yield, but it usually underperforms the newer corporation’s stock because it requires more complicated tax filings every year.
GE Vernova, the former energy division of General Electric that was spun off as a stand-alone company in 2024, has seen its stock surge nearly eight times since that split.
In 2025, more than half of GE Vernova’s orders came from its Power segment, which provides gas turbines for combined-cycle plants, steam turbines for coal, gas, and nuclear plants, and services for nuclear power plants. Nearly a third of its orders came from its Electrification segment, which provides transformers, breakers, substations, high-voltage direct current systems, and automation, optimization, and protection services for electrical grids.
In the two years since its market debut, GE Vernova’s Power and Electrification orders rose by the double digits as the cloud, data center, and AI markets expanded. That rapid expansion offset the slower growth of its smaller Wind segment, which sells onshore and offshore turbines.
From 2025 to 2028, analysts expect its revenue and adjusted EBITDA to increase at CAGRs of 15% and 55%, respectively. Most of that growth will be driven by the expanding AI market, which is driving utilities to aggressively expand and electrify their power grids. While GE Vernova is often considered a renewables play, its gas-oriented businesses should also continue to expand as the simplest — albeit not cleanest — way to meet that demand.
With an enterprise value of $233 billion, GE Vernova isn’t a bargain at 40 times this year’s adjusted EBITDA. Its paltry forward yield of 0.2% also won’t attract any income investors. But if you expect the demand for energy to outstrip its supply for the foreseeable future, GE Vernova should deserve its premium valuation and set new highs over the next decade.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, GE Aerospace, GE Vernova, and Microsoft. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
The Grid Can’t Keep Up. These 2 Utility Stocks Are the Buys of the Month. was originally published by The Motley Fool
