The utilities sector is on a roll in 2026, and Wall Avenue is feeling upbeat about a few dividend payers with strong prospects. The S & P 500’s utilities sector was the large winner in Friday’s buying and selling, up greater than 2% on the day. It is on observe for its seventh constructive session – its longest rally since July 2024. The sector’s 8% pop in 2026 additionally signifies that utilities are having their greatest begin to a 12 months in a minimum of 25 years, in accordance with BTIG analyst Alex Kania. XLU YTD mountain The State Avenue Utilities Choose Sector SPDR ETF in 2026 “Other than 2020 if utilities are up throughout this era, they continue to be in line to proceed constructive efficiency for the total 12 months,” he stated in a Friday report. “We proceed to see the mix of tailwinds from rising utility progress potential plus the defensive strikes within the total market as supportive of the sector,” the analyst added. Powering this current run are just a few upbeat earnings calls from a slate of utilities, particularly American Electrical Energy and Entergy . American Electrical Energy Wolfe Analysis lifted its ranking on American Electrical Energy to outperform from peer carry out on Friday, recent off a strong fourth-quarter report. The corporate reported adjusted earnings of $1.19 per share on income of $5.31 billion within the interval, whereas the FactSet consensus known as for $1.15 per share and $4.89 billion in income. “AEP is executing effectively beneath new administration and retains including potential upsides to the expansion outlook,” Wolfe analyst Steve Fleishman wrote in his Friday report, noting that his crew sees upside for price-earnings enlargement and earnings per share. “AEP famous upside from $5B in incremental transmission capex,” he added, noting that $2.65 billion of that was associated to a deal wherein it bought strong oxide gas cells from Bloom Vitality as a part of a plan to energy knowledge middle progress . An extended-term tailwind for AEP could be its progress alternatives stemming from knowledge facilities, which is able to “drive 56 [gigawatts] of incremental load by 2030, however solely 28 GW is in its plan,” Fleishman added. The analyst’s value goal of $142 requires about 12% upside from Thursday’s shut. Shares are roaring to start out 2026, up greater than 12%, and the inventory provides a present dividend yield of two.9%. In all, 10 out of 24 analysts fee American Electrical Energy as purchase or robust purchase, and 13 deem it maintain, in accordance with LSEG. Entergy BTIG reiterated its purchase ranking for Entergy on Friday, sustaining its value goal of $111. That implies almost 9% upside from Thursday’s shut. Adjusted earnings for Entergy got here in at 51 cents per share within the fourth quarter, simply falling wanting the FactSet consensus for 52 cents per share. The corporate additionally issued its 2026 steerage, calling for adjusted earnings of $4.25 to $4.45 per share. The FactSet consensus lands throughout the vary, coming in at $4.38 per share. BTIG’s Kania highlighted Entergy’s outlook for gross sales progress, wherein the corporate is now calling for a roughly 8% compound annual progress fee for retail gross sales and a 15% CAGR for industrial gross sales by 2029. The corporate final known as for a roughly 7% gross sales progress for retail and a spread of 13% to 14% for industrial gross sales. “We notice that ETR has maintained its 7-12 GW pipeline and consider it has taken a extra conservative stance in saying new initiatives which can be in its line-of-sight,” Kania wrote. Shares of Entergy are up greater than 14% in 2026, and the inventory has a present dividend yield of two.4%. Analysts are largely bullish, with 19 out of 25 ranking it a purchase or robust purchase, per LSEG. —CNBC’s Michael Bloom and Nick Wells contributed reporting.