2 trending utility stocks to watch amid earnings release: WM and AEP

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Highlights:

  • Waste Management, Inc. (NYSE: WM) has raised its fiscal 2022 revenue outlook.
  • American Electric (NASDAQ: AEP) has reiterated its non-GAAP operating income guidance range for 2022.
  • AEP stock jumped nearly ten per cent year-over-year (YoY).

Waste Management, Inc. (NYSE: WM) and American Electric Power Company, Inc. (NASDAQ: AEP) are among the top players in the US utility segment. Both the companies reported their earnings on Wednesday, July 27.

The utility sector is often considered to be a safer option by some investors as the demand for its services, like electricity, water, waste management, etc., generally doesn't fall amid an economic downturn such as a recession or inflation.

Now, let's discuss the earnings of two utility companies and their recent stock performance.

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Waste Management, Inc. (NYSE: WM)

The waste management company was up 0.59 per cent at US$ 155.92 at 8:41 am ET on July 27, after the company released its earnings and raised fiscal 2022 revenue guidance.

It reported a revenue of US$ 5.02 billion in Q2 FY22, relatively up from US$ 4.47 billion in the year-ago quarter. Its income from operations was US$ 890 million in Q2 FY22, against US$ 791 million in Q2 FY21.

Waste Management's net income was US$ 587 million, or US$ 1.41 per diluted share in Q2 FY22, comparatively up from US$ 351 million, or US$ 0.83 per diluted share in Q2 FY21.

The Houston, Texas-based firm now expects its revenue growth to be about ten per cent this year, implying a surge of 400 basis points from its previous guidance's midpoint.

WM stock lost 7.1 per cent this year but rose at a rate of 5.67 per cent in one year.

American Electric Power Company, Inc. (NASDAQ: AEP)

In its latest financial report, the electric utility company reaffirmed its non-GAAP operating income outlook (between US$ 4.87 and US$ 5.07) for 2022. In the second quarter that ended on June 30, 2022, its revenue was US$ 4.6 billion, up US$ 0.8 billion from US$ 3.8 billion in Q2 FY21.

Its GAAP earnings were US$ 524.5 million in Q2 FY22 compared to that of US$578.2 million in Q2 FY21.

AEP stock rose 9.96 per cent in the last 12 months and surged 8.37 per cent this year. At the time of writing, it was trading 20.19 per cent above its 52-week low of US$80.22 (December 1, 2021).

Its current RSI is 56.11, which can signify that it is currently at a neutral state.

Bottom line

The S&P 500 utility index has largely traded in the negative line this year, dropping about 1.17 per cent year-to-date (YTD). However, in the last 12 months, it added 7.63 per cent. On the other hand, the S&P 500 index slumped 17.73 per cent YTD, while declining 11.33 per cent in one year.


 


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