Are these 7 utility stocks poised for another year of growth?

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Are these 7 utility stocks poised for another year of growth?

 Are these 7 utility stocks poised for another year of growth?
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Highlights

  • NextEra Energy Partners, LP (NYSE: NEP) has a dividend yield of 3.22% and a P/E ratio of 30.88.
  • Middlesex Water Company’s (NASDAQ: MSEX) P/E ratio is 47.28. The YTD return was 38.31%.
  • Otter Tail Corporation (NASDAQ: OTTR) has a dividend yield of 2.34%. Its stock gained 55.39% YTD.

Utility stocks provide electricity, water, natural gas, waste disposal services, etc., to customers, including residential complexes, commercial and industrial centres, and the government. Utility stocks are considered stable due to the constant demand for their services. These companies also pay regular dividends to their shareholders.

Hence, these stocks generally see steady growth in the long term and provide income to investors. Here we discuss the top seven utility stocks that performed well in 2021.

NextEra Energy Partners, LP (NYSE: NEP)

Dividend yield – 3.22% 

The Juno Beach, Florida-based company is engaged in wind, solar, and natural gas projects. Its main operations, including a natural gas infrastructure project, are in North America. It formed a limited partnership to acquire and manage long-term energy contracts for steady cash flow.

For the nine months ended Sept 30, 2021, NEP’s operating revenue was US$751 million compared to US$705 million in the same period in 2020. The net income in the first nine months of 2021 was US$146 million compared to a loss of US$(119) million a year ago.

It has a market capitalization of US$7.2 billion and a P/E ratio of 30.88.

The stock closed at US$85.15 on Dec 8.

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Top utility stocks of 2021.

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Otter Tail Corporation (NASDAQ: OTTR)

Dividend yield – 2.34%

The Fergus Falls, Minnesota-based Otter Tail Corporation is an energy company. It sells electricity, fabricated metal components, and plastic pipes. 

For the nine months ended Sept 30, 2021, Otter Tail earned revenue of US$863.6 million compared to US$663 million in the corresponding period of 2020. The net income was US$125 million in the first nine months of 2021 compared to US$77 million in 2020. The earnings per share diluted rose to US$2.99 in the period versus US$1.89 per share diluted a year ago.

It has a market cap of US$2.75 billion and a P/E ratio of 19.21.

The stock closed at US$66.86 on Dec 8.

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National Fuel Gas Company (NYSE: NFG)

Dividend yield – 2.94%

The Williamsville, New York-headquartered energy company is engaged in producing, transporting, and distributing natural gas. It earns revenue from four segments: Exploration & Production, Pipeline & Storage, Gathering, and Utility.

For the fiscal year ended Sept 30, 2021, it posted operating revenue of US$1.74 billion and net income of US$363 million, with earnings per share diluted of US$3.97. The operating revenue and net loss for FY 2020 were US$1.54 billion and US$123.7 million, respectively. 

The company has a market capitalization of US$5.7 billion and a P/E ratio of 15.8.

The stock closed at US$62.54 on December 8, 2021.

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Middlesex Water Company (NASDAQ: MSEX)

Dividend yield – 1.12%

The Iselin, New Jersey-based company owns and operates water utility and water systems in the US. It has two business segments: Regulated and Non-Regulated. 

The regulated business includes water collection and distribution services for residential, commercial, and industrial customers. The non-regulated business provides services for private water and wastewater systems on contract. 

For the nine months ended Sept 30, 2021, its operating revenue was US$109 million compared to US$107 million in the same period a year ago. The net income was US$29.3 million compared to US$30.1 million in the same period a year ago.

The company has a market capitalization of US$1.76 billion and a P/E ratio of 47.28.

The stock closed at US$103.17 on Dec 8. 

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FirstEnergy Corp. (NYSE: FE)

Dividend yield – 3.95%

The Akron, Ohio-based FirstEnergy is an investor-owned utility company. Along with its subsidiaries, FE is involved in transmitting, distributing, and generating electricity. 

It posted revenue of US$8.47 billion for the nine months ended Sept 30, 2021, compared to US$8.25 billion in the same period of 2020. The net income was US$856 million, up 2%, compared to a net income of US$837 million in the same period of the previous year.

The company has a market capitalization of US$21.49 billion and a P/E ratio of 19.45.

The stock closed at US$39.40 on Dec 8, 2021.

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UGI Corporation (NYSE: UGI)

Dividend yield – 3.1%

The Pennsylvania-based UGI is a holding company engaged in transporting, storing, and marketing energy and related services. Its AmeriGas Propane segment is involved in the propane distribution business. UGI International segment is in LPG distribution, Midstream & Marketing segment is in energy-related businesses, and UGI utility segment is engaged in natural gas and electricity sector.

For the fiscal year ended Sept 30, 2021, the company posted revenue of US$7.4 billion compared to US$6.56 billion for FY 2020. The net income was US$1.47 billion in FY 2021 versus US$0.532 billion for the fiscal year 2020. 

The company has a market capitalization of US$9.3 billion and a P/E ratio of 6.44.

The stock closed at US$44.85 on December 8, 2021.

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Top utility stocks of 2021.

Source - pixabay

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Kenon Holdings Ltd. (NYSE: KEN)

Dividend yield – 3.98%

The Millenia Tower, Singapore-based KEN is a holding company. Its operating segments include OPC, Quantum, and ZIM. Its major revenue comes from the OPC segment that constructs and operates power plants and sells electricity in Israel.

For the Sept quarter of 2021, ZIM’s net profit was US$1,463 million against US$144 million in Q3 of 2020. OPC booked a net loss of US$33 million against a net profit of US$5 million in the same period of 2020.

The company has a market capitalization of US$2.59 billion.

The stock closed at US$47.55 on December 8, 2021.

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Bottomline

The S&P 500 Utilities Sector Index gained 8.86% YTD. However, investors must carefully analyze the company fundamentals and the broader market before investing in stocks.

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