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The 5 Strongest Utility Stocks to Invest in Today

August 04
10:56 2022

The utility sector, which includes companies supplying electricity, natural gas, and water, is known for its defensive nature, given the consistent demand for these services irrespective of economic cycles.

Although rising input costs and labor constraints are leading to increasing electricity and gas prices, the inelastic demand for these resources, especially this summer, should help companies in this space grow significantly. Moreover, long-term contracts with various governments should help utility companies perform steadily.

In addition to the non-cyclical nature of business, impressive dividend payouts of utility companies make them attractive to investors amid the uncertainties surrounding the economy and the stock market.

Investors’ interest in this space is evident from the Utilities Select Sector SPDR ETF’s (XLU) 6.5% returns over the past week versus the SPDR S&P 500 Trust ETF’s (SPY) 4.3% returns. The global utility market is expected to grow at a 7.9% CAGR to reach $8.11 trillion by 2026.

Therefore, fundamentally sound and dividend-paying utility stocks Genie Energy Ltd. (GNE – Get Rating), Otter Tail Corporation (OTTR – Get Rating), Vistra Corp. (VST – Get Rating), TransAlta Corporation (TAC – Get Rating), and Hawaiian Electric Industries, Inc. (HE – Get Rating) could be great investments now.

Genie Energy Ltd. (GNE – Get Rating)

GNE supplies electricity and natural gas to residential and small business customers through its Genie Retail Energy (GRE); GRE International (GREI); and Genie Renewables segments internationally. It also provides energy advisory and brokerage services, solar panel manufacturing and distribution, solar installation design, and project management activities.

GNE will pay a $0.16 quarterly cash dividend on August 15, 2022. On July 25, 2022, GNE’s Genie Renewables division announced the formation of Sunlight Energy Investments, which will act as the primary equity financing vehicle for Genie Renewables-originated commercial, community, and utility-scale solar projects and also will participate in projects originated by other solar developers. This will help the company to contribute to the transition to renewable energy.

For its fiscal 2022 first quarter ended March 31, 2022, GNE’s gross profit increased 259.9% year-over-year to $45.54 million. The company’s income from operations came in at $24.43 million for the quarter, versus a loss of $5.47 million in the prior-year period.

Its net income came in at $17.52 million, compared to a loss of $2.36 million in the prior-year period. GNE’s EPS came in at $0.67, versus a $0.09 loss per share in the year-ago period. It had $88.19 million in cash and cash equivalents as of March 31, 2022.

Over the past week, the stock has gained 3.1% to close the last trading session at $9.63.

GNE’s POWR Ratings reflect this promising outlook. It has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Continue Reading at StockNews.com

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