Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Top 3 Utilities Stocks Powering Up as Recession Fears Rise

Power line with sun - stock image

Utilities stocks—those companies providing essential water, gas, electricity, and similar services—are a haven for investors when other sectors become too risky. The reasoning behind this is that there will always be relatively consistent demand for utilities services, even when the broader market is struggling.

As recession fears heat up in early 2025, utilities stocks have climbed as well. As of March 7, 2025, the benchmark Utilities Select Sector SPDR ETF (NYSEARCA: XLU) climbed by nearly 21% in a year's time. For comparison, the S&P 500 achieved only roughly half of those gains in the same time period. While this ETF's performance is essentially flat year-to-date as of the same day, that nonetheless beats the broader market, which has declined by about 3% in the same timeframe.

Investors often do not turn to utilities stocks in an effort to see outsized gains. Rather, these companies provide stability when others may falter. Still, a group of analyst-favorite utilities firms appear to be poised for potential share price or earnings growth in the near future, and investors looking for a defensive play might start their search here.

California Water Service Group Sees Strong Growth and Major Infrastructure Investments in 2024

[content-module:CompanyOverview|NYSE: CWT]

California Water Service Group (NYSE: CWT) provides domestic and commercial water services for customers in the western and southwestern United States as well as Hawaii. The company had a banner year in 2024—operating revenue surged by more than 30% year-over-year (YoY) to over $1 billion, diluted earnings per share (EPS) more than tripled YoY, and the company made an essential investment of $471 million in infrastructure, helping prepare it for new climate-related threats and increased demand.

California Water Service attributed top-line gains to both increased rates and higher consumption, suggesting that customers have been tolerant of higher costs for their water services. The higher revenue level also sent profit margins soaring to 18%.

Water services stocks like CWT have tended to underperform in recent months—CWT shares are behind the utilities sector more broadly, with gains of just over 7% in the last year. This does mean, though, that California Water Service has a relatively low P/E ratio of 14.8 compared to historical levels. Further, its dividend yield of 2.5% makes it an attractive prospect for investors looking for passive income.

Consolidated Water Faces Short-Term Setback But Poised for Long-Term Growth

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Another water services firm, Consolidated Water Co. Ltd. (NASDAQ: CWCO) also warrants a closer look by investors. This firm operates water production and treatment plants throughout the United States and abroad. Unlike CWT, CWCO shares have dipped in the last year, falling about 7% in that time. One reason for this is the company's lackluster third-quarter earnings, in which both total revenue and net income from continuing operations fell YoY.

A closer inspection, though, reveals that this negative performance was likely the result of multiple major construction projects, both of which are now complete. Perhaps more importantly, the company's water sales on Grand Cayman have increased. Then, in February 2025, the company's Cayman Island-based subsidiary received a new concession from the island's government, providing it continued exclusive rights to produce and supply potable water.

With a dividend yield of 1.6%, Consolidated Water is not quite as impressive as California Water Service. However, if the business on Grand Cayman continues to thrive and top and bottom-line performance improves, this may rise as well.

AI Bulls Turn to Vistra for Power Generation Needs

[content-module:CompanyOverview|NYSE: VST]

Vistra Corp. (NYSE: VST) provides retail electricity and power generation services. Unlike the stocks above, it experienced a significant share price rally late in 2024. Despite a significant sell-off early in 2025, the company's stock nonetheless soared by 79% in the last 12 months.

The rally in VST shares may be due to the company's interest in nuclear power, an increasingly popular power source for data centers and companies utilizing AI.

Because of its involvement in the AI space, Vistra shares may have been susceptible to the industry-wide decline following the unveiling of Chinese firm DeepSeek's AI model in January, undercutting expectations for AI power demand.

Still, the trend is positive for AI adoption worldwide, and Vistra remains well-positioned to capitalize on that increased demand. This may be why 11 out of 13 analysts rating the stock have offered VST a Buy rating and why the company's consensus price target of $162.83 represents nearly 44% in upside potential.

Where Should You Invest $1,000 Right Now?

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See The Five Stocks Here

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