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). Some utilities companies with operations in Texas have faced major challenges in maintaining power generation capacity due to severe weather conditions sweeping the nation, including many southern states.

Utilities stocks, as represented by the Utilities Select Sector SPDR ETF (XLU), have significantly underperformed the broader market over the past year. The XLU has provided a total return of -8.8% over the past 12 months, well below the Russell 1000's total return of 21.4%, as of February 17, 2021. All statistics in the tables below are as of February 17.

Here are the top 3 utilities stocks with the best value, the fastest 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) 39.77 9.7 2.5
Sempra Energy ( SRE) 124.61 36.0 9.7
Vistra Corp. ( VST) 22.01 10.8 12.3

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 Energy announced in early February that Kirkland Andrews was stepping down as the company's chief financial officer (CFO). Gaetan Frotte, the company's senior vice president and treasurer, was appointed to serve as interim CFO as the company conducts a search for a permanent CFO.
  • 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.
  • Vistra Corp.: Vistra operates an integrated retail and generation business. It provides electricity generation, wholesale energy sales and purchases, commodity risk management, and retail sales of electricity. The company announced on February 17 that approximately 1,000 megawatts of its capacity had failed to produce electricity in Texas due to the extreme weather conditions.

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 (%)
Vistra Corp. (VST) 22.01 10.8 291.3
Public Service Enterprise Group Inc. ( PEG) 58.01 29.3 44.3
UGI Corp. ( UGI) 40.25 8.4 44.0

Source: YCharts

  • Vistra Corp.: See above for company description.
  • Public Service Enterprise Group Inc.: Public Service Enterprise Group is a gas and electric utility company that provides services to customers in New Jersey. The company announced in early December that it has entered into an agreement with Ørsted North America to acquire a 25% interest in the 1,100-megawatt Ocean Wind project, New Jersey's first offshore wind farm.
  • UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. The company announced at the end of December that it agreed to acquire Mountaintop Energy Holdings LLC for $540 million. Mountaintop Energy owns Mountaineer Gas Co., the largest gas local distribution company in West Virginia. The deal is expected to close in the second half of 2021.

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 (%)
The AES Corp. ( AES) 28.76 19.1 42.1
NextEra Energy Inc. ( NEE) 80.68 158.1 18.3
American Water Works Co. Inc. ( AWK) 160.78 29.1 17.2
Russell 1000  N/A N/A 21.4
Utilities Select Sector SPDR ETF (XLU) N/A N/A -8.8

Source: YCharts

  • 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.
  • 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 announced in early December that its subsidiary, NextEra Energy Resources LLC, had acquired eIQ Mobility, a leading software provider of mobility planning solutions. The acquisition will allow the company to aid customers in identifying economic operational and sustainable pathways for fleet vehicle conversions.
  • American Water Works Co. Inc.: American Water Works is a holding company that provides water, wastewater, and other water-related services.

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