Have you noticed how electricity bills keep climbing while the headlines talk nonstop about data centers and artificial intelligence? That growing thirst for power is creating some of the most interesting opportunities I’ve seen in the utilities space for years. After decades of relatively flat demand, the sector suddenly finds itself at the center of a structural shift. Aging infrastructure needs billions in upgrades, governments are pouring money into modernization, and companies that can deliver reliable, contracted cash flows look increasingly attractive. Today I want to walk through three names that currently trade at discounts yet offer compelling growth and income profiles.
Why Utilities And Infrastructure Deserve Fresh Attention
Most of the grid and related infrastructure we rely on was built in the decades after World War II. For years it received only modest investment. That under-spending is catching up with us. Significant capital is now required simply to keep systems reliable, let alone expand them for new sources of demand. In the United States the Inflation Reduction Act has already directed large sums toward clean energy and grid improvements. Germany has approved a massive multi-hundred-billion-euro infrastructure package. Similar programs are appearing elsewhere.
At the same time electricity consumption is accelerating after roughly a quarter-century of stagnation or decline. Projections point to roughly a 50 percent rise over the next decade. A major driver is the rapid build-out of energy-intensive artificial intelligence data centers. These facilities are locking in multi-decade power purchase agreements, creating highly visible, profitable revenue streams for the utilities that can supply them. In my view the market has not fully priced this combination of regulated growth and contracted demand.
Utilities have long been viewed as defensive holdings. That reputation remains valid, yet the growth component is becoming more pronounced. When you combine inflation-linked revenues, high levels of contracted cash flow, and multi-year capital investment programs, you get a sector that can deliver both income and capital appreciation. The challenge, of course, is finding names that still look reasonably valued. Three stand out to me right now.
Brookfield Renewable Partners: Global Scale With Contracted Growth
One of the more surprising pullbacks this year has hit a large Canadian renewable developer. Shares of Brookfield Renewable Partners have declined more than 20 percent from their late-May highs. That correction has created what looks like an attractive entry point for a business with genuine global reach and a clear strategy.
The company operates a high-quality portfolio of renewable assets across North America and internationally. Management’s approach centers on assembling the assets that will matter most for long-term energy security. That includes hydro, wind, solar, and, more recently, nuclear exposure through the Westinghouse acquisition completed in 2023. The group has also built a substantial battery storage franchise, supported by an 80-gigawatt development pipeline and reinforced by the 2024 purchase of Neoen.
What I find particularly appealing is the contractual foundation of the business. Roughly 90 percent of expected earnings over the next several years should come from long-term contracts. About 70 percent of revenues carry inflation protection. Those features provide a level of predictability that is rare outside the utilities sector. Management guides for earnings growth of around 15 percent annually over the next three years. The balance sheet ranks among the stronger ones in the industry, which supports both the growth plan and the current 5.5 percent dividend yield.
Data centers represent a clear opportunity. The company is already positioned to supply power and storage solutions to large technology customers seeking reliable, low-carbon energy. In a market still digesting higher interest rates and shifting renewable valuations, the recent share price weakness feels overdone relative to the quality of the assets and the contracted cash-flow profile.
ADMIE: Fast Growth In A Regulated European Market
Shifting to Europe, Greece’s power transmission operator offers exposure to one of the continent’s faster-growing electricity markets. Through its subsidiary IPTO, the company is the sole transmission system operator in the country. The regulated asset base is scheduled to roughly double by 2029, funded in part by a $530 million equity raise completed earlier this year.
The regulatory framework is constructive. It allows a pre-tax return on equity of 9.8 percent, which sits at the upper end of the range among European peers. That visibility supports ambitious capital expenditure while still delivering attractive returns. Shares have pulled back more than 10 percent since late June and currently trade at roughly 14 times earnings with a 2.7 percent dividend yield. Medium-term earnings-per-share growth is expected in the 25 to 30 percent range annually.
I like the combination of regulated growth and a still-reasonable valuation. Transmission businesses tend to be less exposed to commodity price swings than generation assets, and the Greek market is modernizing rapidly to accommodate more renewable generation and rising demand. The equity raise has strengthened the balance sheet and reduced financing risk around the expansion program. For investors seeking European exposure with clearer growth visibility than many traditional utilities, this name deserves a closer look.
SSE: Integrated Energy Transition Play With Attractive Valuation
The third name is a well-known UK-listed energy group that combines flexible renewable generation with substantial regulated transmission and distribution assets. By 2030 the company expects roughly 80 percent of group revenues to be either fully regulated or contracted. That shift should reduce earnings volatility and support a more predictable growth trajectory.
Management has laid out a fully funded £33 billion capital expenditure program for the 2025-2030 period. The regulated asset base is projected to grow at about 25 percent annually over that window. Earnings-per-share growth is expected to remain solidly in double digits, while the dividend is guided to rise between 5 and 10 percent each year over the medium term. The shares currently trade on a price-to-earnings multiple below 12 times, which looks inexpensive relative to the growth profile and compared with many European peers.
What stands out is the balance between growth and income. The company is investing heavily in the energy transition yet has structured the business so that a rising proportion of cash flows is protected by regulation or long-term contracts. That combination has become rarer as pure merchant generators have seen more volatility. At current levels the valuation appears to underappreciate the visibility of the capital plan and the improving quality of earnings.
Key Drivers Supporting The Broader Thesis
Several structural forces underpin the attractiveness of these businesses. First, electricity demand is no longer the slow-growing or stagnant variable it was for many years. The combination of electrification of transport and heating, plus the rapid expansion of data centers, is changing the demand curve. Utilities that can add generation and transmission capacity in a timely manner stand to benefit from multi-year growth rather than the more modest increases of the past.
Second, the regulatory environment in many markets has become more supportive of investment. Allowed returns on equity for transmission and distribution businesses remain reasonable, and policy makers recognize that grid modernization is essential for integrating renewables and meeting reliability standards. Companies with clear capital plans and constructive regulation can compound their asset bases at attractive rates of return.
Third, inflation protection is more widespread than many investors appreciate. A meaningful share of revenues for these businesses is linked to inflation indices or subject to periodic regulatory reviews that incorporate cost inflation. In an environment where inflation remains a background concern, that feature provides an important form of protection for both earnings and dividends.
I’ve followed the utilities sector for a long time, and the current setup feels different from the low-growth, high-yield profile that dominated the previous decade. Growth is becoming a more important part of the investment case without sacrificing the defensive characteristics that attract income-oriented investors.
Valuation Snapshot And Relative Positioning
Looking across the three names, the valuation ranges are modest relative to the expected growth rates. One trades at less than 12 times earnings with double-digit EPS growth and mid-single-digit dividend increases. Another sits around 14 times earnings while delivering 25-30 percent annual earnings growth. The third offers a 5.5 percent yield alongside mid-teens earnings growth backed by long-term contracts.
These multiples do not scream “cheap” in absolute terms when compared with some traditional value stocks, yet they look reasonable once the growth and quality of earnings are taken into account. Many broader market indices trade at higher multiples with less visibility on medium-term earnings. The combination of contracted or regulated revenues, inflation linkage, and visible capital programs creates a risk-reward profile that I find appealing in the current environment.
| Company Focus | Approx. P/E | Dividend Yield | Expected EPS Growth |
| Global Renewables & Storage | Valued for yield | 5.5% | ~15% annually |
| European Transmission | ~14x | 2.7% | 25-30% annually |
| Integrated UK Energy | <12x | Growing 5-10% | Double digits |
The table above is illustrative rather than precise, but it captures the essential trade-offs. Higher near-term growth tends to come with lower current yields, while the more mature contracted business offers a richer income stream. Portfolio construction can lean on one or more of these characteristics depending on an investor’s objectives.
Risks Worth Keeping In Mind
No investment is without risks, and utilities are no exception. Interest rate sensitivity remains a factor. Higher yields can pressure valuations for income-oriented stocks even when the underlying businesses continue to perform well. Regulatory changes can also alter allowed returns, although the frameworks governing these three companies currently look supportive.
Execution risk around large capital programs is real. Delivering projects on time and on budget is never guaranteed, particularly when supply chains for transformers, cables, and specialized equipment remain tight. Currency exposure can affect results for companies with international operations. Finally, political and policy shifts can influence the pace of renewable deployment or the structure of electricity markets.
I still prefer these risks to those facing many pure merchant generators or highly leveraged developers. The high proportion of contracted and regulated cash flows provides a meaningful cushion. Diversification across geographies and technologies further reduces single-point failure risk.
How These Names Fit Into A Broader Portfolio
For investors focused on income, the higher-yielding name with strong contractual coverage can serve as a core holding. Those seeking faster capital appreciation may lean toward the transmission operator with the steepest earnings growth trajectory. The integrated UK group offers a middle path with solid growth, improving earnings quality, and a growing dividend.
In my experience, utilities work best as part of a diversified equity allocation rather than a standalone bet. They can dampen overall portfolio volatility while still participating in the structural growth story of electrification and infrastructure renewal. Pairing them with higher-growth technology or industrial names can create a balanced exposure to the energy transition theme without concentrating risk in any single sector.
Position sizing should reflect individual risk tolerance and time horizon. These are not trading vehicles; they are businesses that compound over multi-year periods. Patience tends to be rewarded when the underlying cash flows remain predictable and the capital programs are executed competently.
Looking Ahead: Structural Tailwinds Remain Intact
The next several years should see continued pressure on electricity systems. Data center load is still in the early innings of its growth phase. Electrification of other sectors of the economy will add further demand. At the same time, the need to replace aging assets and integrate intermittent renewable generation will require sustained capital investment.
Companies that already operate essential infrastructure, maintain constructive regulatory relationships, and possess the balance-sheet strength to fund expansion are well placed. The three discussed here check those boxes to varying degrees. Their current valuations appear to leave room for positive surprises if growth materializes as expected and if investor interest in the sector continues to broaden.
Perhaps the most interesting aspect is how the investment narrative has evolved. A few years ago many observers viewed utilities primarily through the lens of bond-proxy yields. Today the growth component is harder to ignore. That shift in perception is still incomplete, which is precisely why selective opportunities remain.
I will continue to monitor execution on the capital plans, regulatory developments, and the pace of data-center contracting. Those factors will ultimately determine whether the current growth expectations are met or exceeded. For now, the combination of undervaluation relative to growth, high levels of cash-flow visibility, and exposure to durable structural trends makes these three names worth serious consideration for long-term portfolios.
The utilities and infrastructure sector is no longer just about steady dividends. It is becoming a growth story driven by real physical demand and multi-year investment cycles. Finding companies that still trade at reasonable prices while offering that growth and income combination is not always easy. The three highlighted here currently stand out. Whether any of them deserves a place in your own portfolio depends on your objectives, time horizon, and risk tolerance, but they illustrate why the broader theme deserves renewed attention from investors.
