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, and include Duke Energy Corp. (DUK), Southern Co. (SO), and American Electric Power Co. Inc. (AEC). Utilities stocks, as represented by the Utilities Select Sector SPDR ETF (XLU), have underperformed the broader market with a total return of -0.7% compared to the S&P 500's total return of 8.7% over the past 12 months. These market performance numbers and the statistics in the tables below are as of May 26.

Here are the top 3 utilities stocks with the best value, the fastest earnings growth, and the most momentum.

Best Value Utilities Stocks

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
NRG Energy Inc. (NRG) 35.72 8.7 2.3
PPL Corp. (PPL) 25.65 19.7 10.5
Exelon Corp. (EXC) 36.85 35.9 13.8

Source: YCharts

  • NRG Energy Inc.: NRG Energy is an integrated power company that produces, sells, and distributes energy and energy services. The company provides energy production and cogeneration facilities, thermal energy production, and energy resource facilities. NRG reported a 7% decline in revenue and a 75% decline in net income for Q1 2020, which ended 31 March 2020. The company noted that there has been a reduction in load across the markets in which it operates due to COVID-19, and that uncertainty about demand will continue until the economy recovers.
  • PPL Corp.: PPL is an energy and utility holding company that, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company announced in late February that Chairman and Chief Executive Officer (CEO) William H. Spence would be retiring on 1 June 2020. PPL President and Chief Operating Officer (COO) Vincent Sorgi was elected to succeed Spence.
  • Exelon Corp.: Exelon is a utility services holding company that, through its subsidiaries, engages in the generation and distribution of energy.

Fastest Growing Utilities Stocks

These are the utilities stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

Fastest Growing Utilities Stocks

 

 Price ($) Market Cap ($B) EPS Growth (%)
Pinnacle West Capital Corp. (PNW) 72.66 8.2 68.8
Sempra Energy (SRE) 123.81 36.2 59.1
Alliant Energy Corp. (LNT) 46.38 11.6 32.1

Source: YCharts

  • Pinnacle West Capital Corp.: Pinnacle West Capital is a utility holding company that, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company announced an 11% decline in revenue for Q1 2020, which ended 31 March 2020. However, net income grew 53% compared to the same quarter a year ago. Pinnacle West Capital noted that future results could be affected by the coronavirus pandemic, but the company maintained its earnings guidance for 2020.
  • Sempra Energy: Sempra is an energy services holding company that, through its subsidiaries, generates electricity, delivers natural gas, operates natural gas pipelines and storage facilities, and operates a wind power generation project. The company announced in late April that it had completed the $3.59 billion divestiture of electrical company Luz Del Sur in Peru. The assets were sold to China Yangtze Power International (Hongkong) Co. Ltd.
  • Alliant Energy Corp.: Alliant Energy is a public-utility services company that supplies electricity, natural gas, and water to residential and commercial customers. The company serves the customers in Illinois, Iowa, Minnesota, and Wisconsin.

Utilities Stocks with the Most Momentum

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 (%)
NextEra Energy Inc. (NEE) 233.85 114.5 18.5
Eversource Energy (ES) 78.46 26.4 9.2
Dominion Energy Inc. (D) 80.51 67.6 9.1
S&P 500 N/A N/A 8.7
Utilities Select Sector SPDR ETF (XLU) N/A N/A -0.7

Source: YCharts

  • NextEra Energy Inc.: NextEra is an electric power and energy infrastructure company that generates electricity through wind, solar, and natural gas. Through its subsidiaries, the company also operates multiple commercial nuclear power units. NextEra on April 22 reported a more than 8% rise in adjusted earnings per share for Q1 ending March 31. CEO Jim Robo said the company's strong underlying businesses, along with about $12 billion in liquidity, should enable NextEra to deliver adjusted EPS near the "top end" of the company's expectations for the next 3 years.
  • Eversource Energy: Eversource Energy is a utility holding company that engages in the generation, transmission, and distribution of natural gas and electricity. The company announced earlier this year that it had reached an agreement to acquire the Massachusetts natural gas assets of Columbia Gas for $1.1 billion from NiSource Inc. (NI).
  • Dominion Energy Inc.: Dominion Energy is a producer and transporter of energy products. The company provides natural gas and electric energy transmission, gathering, and storage solutions.