The S&P/ASX 200 Utilities Index (ASX: XUJ) has undergone some consistent and stable growth over the past 12 months as investors use the stocks make a strategic shift to defensive assets during times of uncertainty.
Utilities are often considered defensive stocks because the services are always in demand, regardless of what point of the economic cycle we're in.
This is particularly attractive for investors looking for dividend-paying stocks because stable earnings means a reliable passive payment for investors.
It's not surprising then that the index has shown consistent growth over the past 12 months. At the time of writing, the index is 11.873% higher for the year.
Just 21 companies make up the ASX 200 utilities sector, but there's only one stock I have my eye on. And it could be the best stock you've ever considered.
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The ASX utility stock to watch
The Contact Energy Ltd (ASX: CEN) share price closed 1.49% higher on Tuesday at $8.18 a piece.
Over the year the diversified and integrated energy company's share price is 13.61% higher.
Just last week the company announced its August 2025 sales where it revealed a steady mass market electricity and gas sales of 454GWh in August 2025, alongside a marked increase in mass market netback to $148.36/MWh compared to $131.36/MWh a year ago.
The company also said it has generated or acquired 918GWh of electricity in August, up from 875GWh in the same month last year, and is progressing with major renewable energy projects.
Clearly there are robust growth prospects ahead.
And the best part? Contact Energy has paid shareholders 33.6 cents a share in unfranked dividends over the past 12 months. At the current price, Contact Energy shares trade on an unfranked trailing dividend yield of 4.1%.
What brokers think of the ASX utility stock
Contact Energy is dual listed on the ASX and the New Zealand stock exchange (NZX). In a note to investors last week, following on the ASX 200 energy stock's August operating update, Macquarie Group Ltd (ASX: MQG) announced it had maintained its outperform rating on the shares.
The broker has a 12-month target price target of NZ$11.35 a share. That's 38.8% above the current share price on the NZX of NZ$8.18.
Aussie investors can expect similar, though not identical, price moves for Contact Energy shares on the ASX.
According to TradingView data, analysts are positive on the stock with 3 out of 6 holding a buy or strong buy rating. The average target price on the ASX is $9.19 and the maximum is $10.09. These represent a potential 12.4% to 23.3% upside for investors over the next 12 months, at the time of writing.
