SRE, WTRG, and AES are top for value, growth, and momentum, respectively
The utilities sector is made up of companies that provide electricity, natural gas, water, sewage, and other services to homes and businesses. Many of these companies are heavily regulated. They include major utilities companies such as Dominion Energy Inc. (D), Duke Energy Corp. (DUK), and Xcel Energy Inc. (XEL).
Utilities stocks, as represented by the Utilities Select Sector SPDR ETF (XLU), have significantly underperformed the broader market over the past year. XLU has provided a total return of 14.0% over the past 12 months, as compared with the Russell 1000 index’s total return of 40.1%. These market performance numbers and all statistics in the tables below are as of July 26, 2021.
Here are the top 3 utilities stocks with the best value, the fastest growth, and the most momentum.
These are the utilities stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Utilities Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing 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, delivers natural gas, and operates natural gas pipelines. It also operates wind and solar power generation facilities.
- UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. The company announced in early May a 4.5% increase to its quarterly dividend, marking the 34th consecutive year that the company has raised its dividend. The dividend was scheduled to be payed on July 1, 2021.
- Entergy Corp.: Entergy is an integrated energy company that provides electric power and distribution. The company delivers electricity to retail customers across several states in the southern U.S. Entergy also owns and operates nuclear plants.
These are the top utilities stocks as ranked by a growth model that scores 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 earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Utilities Stocks|
|Price ($)||Market Cap ($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 throughout the U.S. The company announced in early July a 7% increase to its quarterly dividend, which marks the 31st dividend increase in the past 30 years. The dividend is scheduled to be paid on Sept. 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 different regions throughout the U.S.
- Evergy Inc.: Evergy is a provider of electricity generation, transmission and distribution services to customers throughout the U.S. It owns, operates, and maintains thousands of miles of distribution lines.
These are the utilities stocks that had the highest total return over the last 12 months.
|Utilities Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|The AES Corp. (AES)||24.00||16.0||60.3|
|New Fortress 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 operations and generation plants in several countries. The company sells energy to customers under its regulated businesses, 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 constructs energy infrastructure assets. It serves customers throughout the U.S. The company announced in early May financial results for Q1 of its 2021 fiscal year (FY), the three-month period ended March 31, 2021. Its net loss narrowed to $39.5 million from $60.2 million in the year-ago quarter. Revenue for the quarter rose 95.5% YOY.
- Brookfield Renewable Corp.: Brookfield Renewable is an investment company focused on investing in real estate, infrastructure, renewable power, and private equity sectors. It develops and manages a global portfolio of assets and businesses. The company announced in early May financial results for Q1 FY 2021, the three-month period ended March 31, 2021. Brookfield Renewable reported a net loss of $55 million, a significant deterioration from net income of $89 million in the year-ago quarter. Revenue for the quarter fell 2.8% YOY.
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