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), have significantly underperformed the broader market over the past year. The XLU has provided a total return of 5.5% over the past 12 months, well below the Russell 1000's total return of 17.9%, as of November 18, 2020. All statistics in the tables below are as of November 19.

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) 31.34 7.7 2.0
Sempra Energy (SRE) 133.04 38.4 10.3
Vistra Corp. (VST) 18.62 9.1 10.4

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 posted a 33.1% decline in net income as revenue fell 6.2% in Q3 2020, which ended September 30, 2020. The company said that its planned acquisition of Direct Energy was on track to close by the end of this year.
  • 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 reported net income growth of 287.7% on revenue growth of 11.2% in Q3 2020, which ended September 30, 2020. Net income was boosted by lower fuel costs, purchased power costs, and delivery fees. The company also benefitted from lower depreciation and amortization costs, and lower interest expenses compared to the year ago quarter.

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) 18.62 9.1 291.3
Public Service Enterprise Group Inc. (PEG) 57.82 29.3 44.3
Entergy Corp. (ETR) 110.19 22.1 42.3

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 posted net income growth of 42.7% on revenue growth of 3.0% in Q3 2020, which ended September 30, 2020. Net income was boosted by lower operating expenses than in the same three-month period a year ago.
  • Entergy Corp.: Entergy is an integrated energy company engaged in electric power production and retail electric distribution operations.

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 (%)
PG&E Corp. (PCG) 12.65 25.1 78.4
American Water Works Co. Inc. (AWK) 156.19 28.3 33.7
NextEra Energy Inc. (NEE) 75.79 148.5 33.4
Russell 1000 N/A N/A 17.9
Utilities Select Sector SPDR ETF (XLU) N/A N/A 5.5

Source: YCharts

  • PG&E Corp.: PG&E operates as a holding company that maintains interests in energy businesses. The company's holdings include public utilities in California, electricity generation operations, natural gas operations, and more. PG&E recently announced the appointment of Patricia K. Poppe as Chief Executive Officer (CEO), effective January 4, 2021. She will succeed Interim CEO William Smith.
  • American Water Works Co. Inc.: American Water Works is a holding company that provides water, wastewater, and other water-related services.
  • 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.