Stocks to watch amid UK's energy price drop talks

Highlights

• Household energy bills are anticipated to drop to an average of £2,053 annually this summer.
• According to consultancy firm Cornwall Insights, the energy regulator Ofgem could reduce energy prices by as much as £446 under a new official price cap.
• It is expected to dip further to £1,976 in autumn.

The energy scenario in the United Kingdom sometime last year was nothing short of a crisis. While the common households struggled with the soaring prices amidst inflation, they had to resort to the government's energy price cap, which ended in April 2023.  

With the temperature rising, households are not feeling the pinch as much as they did in winter last year. Household energy bills are anticipated to drop to an average of £2,053 annually this summer. It is expected to dip further to £1,976 in autumn.

This is largely on the back of regulators' decision to lower the energy price cap this week. According to consultancy firm Cornwall Insights, the energy regulator Ofgem could reduce energy prices by as much as £446 under a new official price cap.

According to analysts at Cornwall Insight, households should be prepared to pay more during the peak winter period. Many expect it may end up being double the rates paid in 2020 and stay through for the rest of the decade.

Currently, an average household spends approximately £3,280 on energy prices. However, the pain is much less courtesy of the Government's Energy Price Guarantee, which has lowered the threshold. But the cap is expected to fall come July as the guarantee rises to £3,000.

Amidst this, Kalkine Media® explores some of the FTSE-listed energy stocks.

National Grid Plc (LON: NG.)

One of the world's leading, largest publicly listed energy and gas transmission and distribution firm, National Grid, holds a market cap of £40,752.52. Offering its service across the UK and the US, the FTSE-100 constituent has given its investors negative annual returns of -8.88 and positive YTD returns of 10.59%.

At the time of writing, it was trading at GBX 11150.50, up/down by 0.68% on 22 May 2023.

Centrica Plc (LON:CNA)

Another UK energy giant, Centrica Plc, on 22 May, was witnessing a rise/fall of 0.43% and was trading at GBX 117.70 at the time of writing. With a market cap of £ 6,611.82 million, Centrica held an EPS of 0.21. Centrica stock has given its shareholders a return of 32.91% on an annual basis and 21.43% on a YTD basis. The Centrica stock gave its investors a dividend yield of 2.51% with a P/E ratio of -8.83.

Diversified Energy Company plc (LON: DEC)

The FTSE-250 constituent, Diversified Energy Company plc, held a market cap of £901.47 million with an EPS of -0.41. On 22 May, the DEC stock witnessed a rise of 1.51% and was trading at GBX 94.20. The Diversified Energy stock has given its shareholders a negative return on YTD and one-year basis of -20.27%24.06%, respectively.