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), an exchange-traded fund, have underperformed the broader market over the past year. XLU has provided a total return of 20.0% over the past 12 months, compared with the Russell 1000 Index’s total return of 34.5%. These market performance numbers and all statistics in the tables below are as of Aug. 23, 2021.

Here are the top three utilities stocks with the best value, fastest growth, and 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 that 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) 43.76 10.7 10.0
UGI Corp. (UGI) 46.56 9.7 10.3
Pinnacle West Capital Corp. (PNW) 78.91 8.9 15.4

Source: YCharts

  • NRG Energy Inc.: NRG Energy owns and operates power-generating facilities, primarily in the United States. The company provides energy production, cogeneration facilities, thermal energy production, and resource recovery facilities and services. The company reported that net income more than tripled on revenue that more than doubled year over year (YOY) in the second quarter (Q2) of 2021. The strong performance was attributable in part to the company’s acquisition of Direct Energy and favorable weather for its East segment.
  • UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. On Aug. 4, 2021, UGI declared a quarterly dividend of $0.345 per share of the company’s common stock. The dividend is payable on Oct. 1, 2021, to shareholders of record as of Sept. 15, 2021.
  • Pinnacle West Capital Corp.: Pinnacle West Capital is a utility holding company. Through a subsidiary, the company offers retail and wholesale electric service throughout the state of Arizona. The company is also involved in real estate development activities.

Fastest Growing Utilities Stocks

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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Utilities Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
NRG Energy Inc. (NRG) 43.76 10.7 246.5 134.3
CenterPoint Energy Inc. (CNP) 26.18 15.5 236.4 10.6
UGI Corp. (UGI) 46.56 9.7 73.2 24.8

Source: YCharts

  • NRG Energy Inc.: See company description above.
  • CenterPoint Energy Inc.: CenterPoint Energy is a public utility holding company. Through subsidiaries, CenterPoint provides electricity transmission and distribution, interstate pipeline operations, natural gas distribution, and power generation, among other related services.
  • UGI Corp.: See company description above.

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 (%)
FirstEnergy Corp. (FE) 38.81 21.1 44.5
UGI Corp. (UGI) 46.56 9.7 43.3
Evergy Inc. (EVRG) 68.91 15.8 41.7
Russell 1000  N/A N/A 34.5
Utilities Select Sector SPDR ETF (XLU) N/A N/A 20.0

Source: YCharts

  • FirstEnergy Corp.: FirstEnergy is a public utility holding company that generates, transmits, and distributes electricity through subsidiaries. The company is also involved in exploration and production of natural gas. On July 22, 2021, the company announced that it had reached an agreement with the U.S. Department of Justice regarding an investigation alleging bribery. First Energy agreed to pay a penalty of $230 million and agreed to the government’s filing of a single charge of conspiracy to commit honest services wire fraud. The U.S. government will drop its charge if First Energy complies with their agreement over the next three years.
  • UGI Corp.: See company description above.
  • Evergy Inc.: Evergy is a provider of electricity generation, transmission, and distribution services to customers throughout the United States. It owns, operates, and maintains thousands of miles of distribution lines.

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