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. XLU has provided a total return of 15.5% over the past 12 months, about one third of the Russell 1000 index's total return of 46.3%, as of May 25, 2021. All statistics in the tables below are also as of May 25.

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
Sempra Energy ( SRE) 135.45 41.0 10.3
UGI Corp. ( UGI) 44.89 9.4 10.6
Entergy Corp. ( ETR) 105.92 21.3 13.3

Source: YCharts

  • Sempra Energy: Sempra is an energy services holding company that generates electricity, delivers natural gas, and operates natural gas pipelines. It also operates a wind power generation project. On May 5, the company reported Q1 2021 results, including a 2.0% year-over-year (YOY) decline in net income and a 7.6% YOY increase in total revenues.
  • UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. For Q2 FY 2021, ended March 31, net income attributable to UGI Corp. more than doubled YOY on total revenue growth of 15.8%.
  • Entergy Corp.: Entergy is an integrated energy company that provides electric power and distribution. The company delivers electricity to retail customers across several states in the southern U.S. Entergy also owns and operates nuclear plants.

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 their 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 or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Utilities Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Essential Utilities Inc. ( WTRG) 47.26 11.6 260.0 128.3
FirstEnergy Corp. ( FE) 37.62 20.5 342.9 0.6
NiSource Inc. ( NI) 25.33 9.9 350.0 -3.7

Source: YCharts

  • Essential Utilities Inc..: Essential Utilities is a regulated utility holding company that provides water, wastewater, and natural gas services to about 5 million customers in eastern, midwestern and southern states, including Pennsylvania, Ohio, Texas, Illinois, New Jersey, and Virginia under the Aqua and Peoples brands.
  • FirstEnergy Corp.: FirstEnergy generates and distributes electricity and explores, produces, and distributes natural gas. It also offers energy management and similar services.
  • NiSource Inc.: NiSource is an energy holding company. Through subsidiaries, it provides natural gas, electricity, and other energy products and services to customers in the Gulf Coast, Midwest, and New England regions. On May 25, the company's board of directors declared a dividend of $0.22 per common share. The dividend is payable on Aug. 20 to shareholders of record as of July 30, 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) 25.34 16.9 112.9
UGI Corp. (UGI) 44.89 9.4 53.4
CenterPoint Energy Inc. ( CNP) 24.94 14.5 51.5
Russell 1000  N/A N/A 46.3
Utilities Select Sector SPDR ETF (XLU) N/A N/A 15.5

Source: YCharts

  • The AES Corp.: AES acquires, owns and operates distribution operations and generation plants in several countries. The company sells energy to customers under its regulated businesses, and it also sells electricity under long-term contracts.
  • UGI Corp.: See company description above.
  • CenterPoint Energy Inc.: CenterPoint Energy is a public utility holding company that owns and operates electric transmission and distribution, power generation, and natural gas distribution facilities. It serves customers in states including Arkansas, Indiana, Louisiana, Ohio, Oklahoma, and Texas. For Q1 2021, CenterPoint reported consolidated income available to common shareholders of $334 million versus a loss in Q1 2020. Losses in Q1 2020 were impacted by after-tax non-cash impairment charges related to the company's midstream investments.

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