After years of outperformance following the crash in 2007-2008 and the ensuing Great Recession, the utility sector was like a warm blanket to frigid cold investors. Solid dividends and a very defensive posture gave shareholders outstanding total returns for years. That all started to end in 2014, and it really came to a halt last year, as the specter of rising rates began to hit the markets.

The reality is we have started 2016 with the worst market performance ever, and some voices on Wall Street are even crying out that a recession could be in the cards. While the reality of that seems unlikely, slow growth will persist, with some major banks eyeing a puny 2% world gross domestic product for this year.

A new report from Deutsche Bank says to overweight the utilities for 2016, as the firm too is dubious that the Federal Reserve is poised to raise rates aggressively against a so-so economic backdrop. The report has three top pick stocks rated Buy for investors to consider now.

NextEra Energy

With a very strong balance sheet, this company is poised for a solid 2016. NextEra Energy Inc. (NYSE: NEE) is a leading clean energy company with consolidated revenues of approximately $17.0 billion, approximately 44,900 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners.

Headquartered in Juno Beach, Fla., NextEra Energy’s principal subsidiaries are Florida Power & Light, which serves approximately 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun.

NextEra Energy expects a compounded annual growth of 6% to 8% in its adjusted earnings per share through 2018. It is aggressively raising its renewables portfolio, with a focus on wind generation facilities. It’s already the largest power generator by both wind and solar energy in the Unites States. By 2019, the company expects to invest about $15 billion, particularly to add both wind and solar generation facilities. Given the strong focus on regulated operations, NextEra’s earnings are expected to rise steadily. Earnings from regulated operations rose from 58% in 2011 to 66% in 2015.

NextEra investors are paid a solid 2.9% dividend. The Deutsche Bank price objective is $118, and the Thomson/First Call consensus price target is $119.44. Shares closed Monday at $106.42.
NRG Energy

This stock has been obliterated, and it may hold huge upside for aggressive accounts. NRG Energy Inc. (NYSE: NRG) is leading a self-described customer-driven change in the U.S. energy industry by delivering cleaner and smarter energy choices, while building on the strength of the nation’s largest and most diverse competitive power portfolio.

The company creates value through reliable and efficient conventional generation while driving innovation in solar and renewable power, electric vehicle ecosystems, carbon capture technology and customer-centric energy solutions. NRG’s retail electricity providers serve almost 3 million residential and commercial customers throughout the country.

CEO David Crane recently was fired as the company looks to separate from the unprofitable home solar business that has been partially responsible for dragging the price down. In fact, the company is pursuing a sale that was announced last fall of a majority stake in a money-losing business. It is a transaction that many feel could help to boost shares, as NRG returns to focusing on the core business.

NRG investors receive a 6.46% dividend. Deutsche Bank has a whopping $18 price target, but the consensus target is even higher at $19.21. The stock closed Monday at $8.98 per share.

WEC Energy

This stock is another steady performer for investors that has good prospects for 2016. WEC Energy Group Inc. (NYSE: WEC) is based in Milwaukee and is one of the nation’s premier energy companies, serving 4.4 million customers in Wisconsin, Illinois, Michigan and Minnesota. Its principal utilities are We Energies, Wisconsin Public Service, Peoples Gas, North Shore Gas, Michigan Gas Utilities and Minnesota Energy Resources. The other major subsidiary, We Power, designs, builds and owns electric generating plants.

Investors cheered a recent 8.2% increase in the dividend, and the board will continue to target a dividend payout ratio of 65% to 70% of earnings, a policy in line with the company’s peers across the utility industry. This marks the 294th consecutive quarter dating back to 1942 that the company will have paid a dividend to its stockholders.

WEC investors are paid a 3.7% dividend. The Deutsche Bank price target is $56. The consensus target is $53.21. The shares closed Monday at $53.31.

The mere fact that the macroeconomic setting could hold back the Federal Reserve from increasing rates puts a nice tailwind behind these top stocks to buy. They should also have very solid total return potential.

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