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 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 dramatically underperformed the broader market, providing investors with a total return of 0.1% compared to the S&P 500's total return of 22.5% over the past 12 months. These market performance numbers and the statistics in the tables below are as of August 24.

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) 34.53 8.4 2.1
Sempra Energy (SRE) 125.48 36.3 8.6
PPL Corp. (PPL) 28.04 21.6 12.2

Source: YCharts

  • NRG Energy Inc.: NRG Energy is an integrated power company that produces, sells, and distributes energy and energy services. The company provides production and cogeneration facilities, thermal energy production, and energy resource facilities. NRG Energy announced in late July plans to acquire Direct Energy from Centrica PLC for $3.6 billion in an all-cash transaction. Centrica PLC's shareholders approved the acquisition on August 20.
  • 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 August 24 the appointment of Lisa Glatch as President and Chief Operating Officer (COO) of subsidiary Sempra LNG.
  • PPL Corp.: PPL is an energy and utility holding company that, through its subsidiaries, engages in the generation, transmission, and distribution of electricity.

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 (%)
Eversource Energy (ES) 86.54 29.7 650.0
Sempra Energy (SRE) 125.48 36.3 504.0
Public Service Enterprise Group Inc. (PEG) 53.28 27.0 196.7

Source: YCharts

  • Eversource Energy: Eversource Energy is a utility holding company that engages in the generation, transmission, and distribution of natural gas and electricity. The company reported net income growth of 662.3% on revenue growth of 3.6% in Q2 2020, which ended June 30, 2020.
  • Sempra Energy: 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 reported net income growth of 194.8% despite an 11.5% decline in revenue in Q2 2020, which ended June 30, 2020. The increase in net income was driven by net gains on trust investments and an absence of losses on asset dispositions compared to Q2 2019.

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) 282.41 138.3 30.5
The AES Corp. (AES) 18.02 12.0 21.8
American Water Works Co Inc. (AWK) 143.64 26.0 17.7
S&P 500 N/A N/A 22.5
Utilities Select Sector SPDR ETF (XLU) N/A N/A 0.1

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 reported a decline in net income of 0.9% and a drop in revenue of 15.4% for Q2 2020, which ended June 30, 2020.
  • 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.
  • American Water Works Co. Inc.: American Water Works is a holding company that provides water, wastewater, and other water-related services.