3 key energy stocks to keep your eye on

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 3 key energy stocks to keep your eye on
Image source: © Zalakdagli | Megapixl.com

Highlights:

  • Energy companies are set to miss their target to install domestic smart meters this year.
  • The meters are crucial to reducing energy demand and preventing blackouts during winter.

The UK's energy regulator Ofgem has fixed a target of installing about three million smart meters this year for domestic firms. However, the firms are set to miss their targets due to issues ranging from supply chain to labour.

New data from industry analysts ElectraLink shows that in the first nine months of the year, only 1.7 million meters have been installed. This means that energy companies will have almost to double their installation rates to achieve the target by the end of this year.

In fact, installation rates are yet to reach the pre-pandemic levels, when restrictions made it difficult to carry out the installations. Smart meters can play a crucial role in reducing the electricity demand, especially when there are fears of blackouts during the winter due to the energy crisis.

Image source: © Pilens | Megapixl.com

Energy bills forecast to exceed £4,000

Meanwhile, the average energy bill will rise to more than £4,000 from April 2023 after the government's U-turn on the energy bills support scheme. On Monday, Chancellor Jeremy Hunt announced that the scheme would not be extended beyond April, and instead, a review will be conducted to offer targeted support to those who need it.

According to consultancy Cornwall Insight, the average household bill in the country will reach £4,347 per year from April if the government does not come forward with special support.

In the wake of this information, investors can keep an eye on the following London-listed stocks.

National Grid plc (LON: NG.)

National Grid is among the world's largest publicly traded utility companies. The FTSE 100 listed firm boasts a market cap of £33,161.11 million and an EPS of 0.65. The company has offered to pay households for reducing their energy consumption during peak times. Its 12-month return currently stands at 1.81%, while on a YTD basis, the stock has given returns of -13.81%. On Tuesday, the Shares of National Grid were up 0.80% at GBX 913.20 as of 8:39 am GMT+1.

Centrica PLC (LON: CNA)

The FTSE 100-listed utility firm has a market cap of £4,271.27 million and an EPS of 0.21. The company has been in talks with the government to reopen a mothballed gas storage facility to bolster UK's energy supplies this winter. Its shares have increased by more than 22% in the past 12 months and by 0.34% on a year-to-date basis. CNA shares were trading 0.66% lower at GBX 71.82 as of 8:55 am GMT+1 on 18 October.

SSE PLC (LON: SSE)

The Scotland-headquartered energy firm belongs to the FTSE 100 index and has a market cap of £16,166.85 million. Its shares were trading at GBX 1,519.00, up 1.74% as of 8:56 am GMT+1 on Tuesday. Over the past 12 months, the share price has slumped by 3.46% and 6.89% on a YTD basis.

Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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