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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 10.6% over the past 12 months, compared with the Russell 1000 (IWB) Index’s total return of 42.6%. These market performance numbers and all statistics in the tables below are as of Oct. 28, 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 | |
| NRG Energy Inc. (NRG) | 40.99 | 10.0 | 9.4 |
| UGI Corp. (UGI) | 40.68 | 9.3 | 9.9 |
| Pinnacle West Capital Corp. (PNW) | 67.62 | 7.6 | 13.2 |
Source: YCharts
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- UGI Corp.: UGI is a domestic and international distributor of energy products and services. It offers propane, natural gas, and electricity. On October 21, UGI receive regulatory clearance for a renewable natural gas pilot program in Pennsylvania. On October 26, UGI and Global Common Energy announce a third renewable natural gas project in upstate New York. UGI Corporation will hold a Q4 fiscal year (FY) 2021 earnings conference call and webcast on Friday, November 19.
- 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. NRG Energy will report Q3 2021 financial results on Nov. 4, 2021.
- Pinnacle West Capital Corp.: Pinnacle West Capital is a utility holding company. Through a subsidiary, the company offers retail and wholesale electric services throughout the state of Arizona. The company is also involved in real estate development activities. Pinnacle’s next quarterly financial report will be released on Nov. 5, 2021.
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) | 42.99 | 10.0 | 246.5 | 134.3 |
| CenterPoint Energy Inc. (CNP) | 26.68 | 15.8 | 236.4 | 10.6 |
| UGI Corp. (UGI) | 44.68 | 9.3 | 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. On Oct. 27, 2021 CenterPoint Energy received approval for 400 megawatts of renewable energy serving southwestern Indiana. The companies next financial report is expected on Nov. 4, 2021.
- UGI Corp.: See company description above.
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 (%) | |
| UGI Corp. (UGI) | 44.68 | 9.3 | 31.1 |
| Exelon Corp. (EXC) | 52.02 | 50.9 | 29.2 |
| The AES Corp (AES) | 25.37 | 16.9 | 26.4 |
| Russell 1000 (IWF) | N/A | N/A | 40.7 |
| Utilities Select Sector SPDR ETF (XLU) | N/A | N/A | 17.8 |
Source: YCharts
- 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. The company’s next earnings report is due out on Nov. 3, 2021.
- UGI Corp.: See company description above.
- The AES Corp.: AES is a power company that produces and distributes electric power in 15 countries. In recent years the company has been very active in the renewable energy sector. On October 25, the company announced a new “Smart Operations Center,” in Dayton, Ohio to improve the efficiency of its US operations. AES reports Q3 earnings on Nov. 4, 2021.
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