The utilities sector is made up of companies that provide services to homes and businesses, such as electricity, natural gas, water, and sewage. These companies are heavily regulated. Among the largest and best-known companies in the sector are Dominion Energy Inc. (D), Duke Energy Corp. (DUK), and Consolidated Edison Inc. (ED). The sector, as measured by the Utilities Select Sector SPDR ETF (XLU), underperformed the overall market during the last 12 months, rising 21.8% compared to the S&P 500's rise of 27.0%. All figures in this story are as of January 7, 2020.
Below we'll look at the top utilities sector stocks for January 2020 based on 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 you’re paying less for each dollar of profit generated.
|Best Value Utilities Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E|
|PPL Corp. (PPL)||35.13||25.4||14.4|
|Southern Co. (SO)||62.50||65.5||14.4|
|NRG Energy Inc. (NRG)||37.28||9.4||16.4|
- 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 reported year-over-year (YOY) operating revenue growth of 3.3% and YOY earnings per share (EPS) growth of 4.8% for Q3 of 2019, the three-month period that ended September 30, 2019.
- Southern Co.: Southern is a public utility holding company that, through its subsidiaries, generates electricity and sells it at the wholesale and retail level. The company also offers wireless telecommunications services, two-way radio, telephone, paging, and internet access services, and offers wholesale fibre optic solutions.
- 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.
Fastest Growing Utilities Stocks
These are the utilities stocks with the highest YOY 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 (%)|
|Sempra Energy (SRE)||148.70||41.9||186.9|
|The AES Corp. (AES)||19.94||13.2||113.3|
|Atmos Energy Corp. (ATO)||111.37||13.6||40.0|
- 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 on Monday that its Sempra LNG subsidiary signed an Interim Project Participation Agreement with Aramco Services Company, a subsidiary of Saudi Aramco, for the Port Arthur LNG export project in Texas.
- The AES Corp.: AES is a power generation and utility company that, through its subsidiaries, operates a diversified portfolio of electricity generation and distribution businesses. The company announced in early November of last year that it was entering into a 10-year partnership with Google in order to accelerate growth and adoption of clean energy by leveraging Google Cloud technology to lead innovation in the sector.
- Atmos Energy Corp.: Atmos engages in the regulated natural gas distribution and pipeline and storage businesses. The company also operates non-utility businesses, providing natural gas marketing and procurement services.
Utilities Stocks with the Most Momentum
These are the utilities stocks that had the highest percentage price increase over the last 12 months.
|Utilities Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|Entergy Corp. (ETR)||119.46||23.8||41.5|
|NextEra Energy Inc. (NEE)||241.74||118.2||40.4|
|Southern Co. (SO)||62.50||65.5||40.2|
|Utilities Select Sector SPDR ETF (XLU)||N/A||N/A||21.8|
- Entergy Corp.: Entergy is an integrated energy company engaged in electric power production and retail electric distribution operations.
- 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. The company reported YOY operating revenue growth of 26.2% for Q3 of 2019 ended September 30. However, EPS declined 13.8% YOY for the quarter.
- Southern Co.: See above for company description.
Yahoo! Finance. "Utilities Select Sector SPDR Fund (XLU) Price Chart," Accessed Jan. 7, 2020.
Yahoo! Finance. "S&P 500 (^GSPC) Price Chart," Accessed Jan. 7, 2020.
PPL Corp. "PPL Corporation Reports Third-Quarter 2019 Earnings," Accessed Jan. 7, 2020.
Sempra Energy. "Sempra LNG And Aramco Services Company Sign Interim Project Participation Agreement For Port Arthur LNG," Accessed Jan. 7, 2020.
The AES Corp. "AES and Google Create Strategic Alliance to Accelerate the Future of Energy," Accessed Jan. 7, 2020.
NextEra Energy Inc. "NextEra Energy reports third-quarter 2019 financial results," Page 1 and 7. Accessed Jan. 7, 2020.