The utility sector consists of companies that provide electricity, natural gas, water, sewage and other services to homes and businesses. Many of these companies are highly regulated. They include major utilities such as Dominion Energy Inc. (D), Duke Energy Corp. (UK) and Xcel Energy Inc. (XEL).
Utility stocks, as represented by the Utilities Select Sector SPDR ETF (XLU), underperformed the broader market significantly over the past year. XLU has delivered a total return of 14.0% over the past 12 months, compared to the Russell 1000 index’s total return of 40.1%. These market performance figures and all statistics in the tables below are as of July 26, 2021.
Here are the top 3 utilities with the best value, fastest growth and most momentum.
These are the utilities with the lowest price-to-earnings ratio in 12 months. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you are paying less for every dollar of profit generated.
|Best Value Nuts Stocks|
|Price ($)||Market Capitalization ($B)||12 month ongoing P/E ratio|
|Sempra Energy (SRE)||130.70||39.6||10.0|
|UGI Corp. (UGI)||46.18||9.6||10.9|
|Entergy Corp. (ETR)||103.78||20.8||13.0|
- Sempra energy: Sempra is an energy services holding company that generates electricity, supplies natural gas and operates natural gas pipelines. It also operates wind and solar power generation plants.
- UGI Corp.: UGI is a national and international distributor of energy products and services. It provides propane, natural gas and electricity. The company announced a 4.5% quarterly dividend increase in early May, marking the 34th consecutive year the company has increased its dividend. The dividend would be paid on July 1, 2021.
- Entergy Corp.: Entergy is an integrated energy company that provides power and distribution. The company supplies electricity to retail customers in several southern US states. Entergy also owns and operates nuclear power plants.
These are the top utility stocks, ranked by a growth model that rates companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and profits are critical factors for a company’s success. Therefore, ranking companies by only one growth metric makes a ranking susceptible to that quarter’s accounting anomalies (such as changes in tax laws or restructuring costs) that may prevent one figure or the other from being representative of the company in general. Companies with quarterly earnings per share or revenue growth of more than 2500% were excluded as outliers.
|Fastest Growing Utility Stocks|
|Price ($)||Market Capitalization ($B)||EPS growth (%)||Revenue growth (%)|
|Essential Utilities Inc. (WTRG)||48.78||12.0||260.0||128.3|
|NiSource Inc. (NI)||25.24||9.9||350.0||-3.7|
|Evergy Inc. (EVRG)||65.15||14.9||171.0||44.3|
- Essential Utilities Inc.: Essential Utilities is a regulated utility holding company that provides water, wastewater and natural gas services to residential, commercial, industrial and public customers in multiple states in the US. The company announced a 7% increase in its quarterly dividend in early July, marking the 31st dividend increase in the past 30 years. The dividend is scheduled to be paid on September 1, 2021.
- NiSource Inc.: NiSource is an energy holding company. Through its subsidiaries, it provides natural gas, electricity and other energy products and services to customers in various regions of the US
- Evergy Inc.: Evergy is a provider of power generation, transmission and distribution services to customers in the US. It owns, operates and maintains thousands of miles of distribution lines.
These are the utility stocks with the highest total returns over the past 12 months.
|Utility stocks with the most momentum|
|Price ($)||Market Capitalization ($B)||12 months sequential total return (%)|
|The AES Corp. (AES)||24.00||16.0||60.3|
|NewFortress Energy Inc. (NFE)||30.47||6.3||52.4|
|Brookfield Renewable Corp. (BEPC)||41.39||7.1||49.0|
|Utilities Select Sector SPDR ETF (XLU)||N/A||N/A||14.0|
- The AES Corp.: AES acquires, owns and operates distribution activities and generating facilities in several countries. The company sells energy to customers as part of its regulated activities and it also sells electricity under long-term contracts.
- New Fortress Energy Inc.: New Fortress Energy is an integrated gas-to-power company that develops, finances and builds energy infrastructure assets. It serves customers all over the US. The company announced financial results in early May for the first quarter of fiscal year 2021 (FY), the three-month period ended March 31, 2021. Net loss decreased to $39.5 million from $60.2 million in the year quarter ago. Sales for the quarter were up 95.5% year over year.
- Brookfield Renewable Corp.: Brookfield Renewable is an investment firm focused on investments in the real estate, infrastructure, renewable energy and private equity sectors. It develops and manages a global portfolio of assets and companies. The company announced financial results in early May for the first quarter of 2021, the three-month period ended March 31, 2021. Brookfield Renewable reported a net loss of $55 million, a significant deterioration from net profit of $89 million in the same year. quarter of last year. Sales for the quarter were down 2.8% year-over-year.
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