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 17.8% over the past 12 months, compared with the Russell 1000 Index’s total return of 40.7%. These market performance numbers and all statistics in the tables below are as of Sept. 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
UGI Corp. (UGI) 42.76 8.9 9.4
NRG Energy Inc. (NRG) 42.18 10.3 9.6
Pinnacle West Capital Corp. (PNW) 72.95 8.2 14.2

Source: YCharts

  • UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. On Sept. 1, UGI announced that it had completed the acquisition of Mountaintop Energy Holdings LLC, owner of Mountaineer Gas Company. Mountaineer is the largest gas local distribution company in West Virginia, serving nearly 215,000 customers. The enterprise value of the acquisition was $540 million. Mountaineer will become a wholly owned subsidiary of UGI.
  • 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. For Q2 2021, ended June 30, NRG reported that net income soared by 244.4% as operating revenues climbed by 134.3% year-over-year (YOY). The company's East and Texas segments drove net income growth, as did NRG's acquisition of Direct Energy. NRG Energy released Q2 2021 results on Aug. 5, 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) 42.18 10.3 246.5 134.3
CenterPoint Energy Inc. (CNP) 24.56 14.6 236.4 10.6
UGI Corp. (UGI) 42.76 8.9 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. For Q2 2021 ended June 30, 2021, CenterPoint's income available to common shareholders nearly quadrupled YOY. Results were affected by a favorable income tax benefit for Q2 2021 as well as an unfavorable COVID-related impact for Q2 2020.
  • 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 (%)
NRG Energy Inc. (NRG) 42.18 10.3 51.3
Exelon Corp. (EXC) 49.38 48.3 45.2
UGI Corp. (UGI) 42.76 8.9 36.1
Russell 1000  N/A N/A 40.7
Utilities Select Sector SPDR ETF (XLU) N/A N/A 17.8

Source: YCharts

  • NRG Energy Inc.: See company description above.
  • Exelon Corp.: Exelon is a utility services holding company. It distributes electricity to customers in Illinois and Pennsylvania through subsidiaries, distributes gas in the Philadelphia area, and operates nuclear power plants in several states. In August, the company announced that it had received a U.S. Department of Energy (DOE) grant to explore the potential benefits of onsite hydrogen production at its Nine Mile Point Nuclear Station in Oswego, N.Y. Hydrogen is a natural byproduct of nuclear energy production and the project aims to provide it as a 100% carbon-free source of power.
  • UGI Corp.: See company description above.

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