Three Utility Stocks To Explore As Economy Reopens

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Three Utility Stocks To Explore As Economy Reopens

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 Three Utility Stocks To Explore As Economy Reopens
Image source: JIMBO EKAPAT,Shutterstock

Summary

  • The stock of Exelon Corp grew 23.48% in the last one year.
  • PPL Corp has invested over US$3 billion in infrastructure in 2020.
  • Pinnacle’s consolidated net income was US$35.6 million in the quarter ended March 2021.

Utility companies that provide services like electricity, natural gas, water, and sewage disposal for residential, commercial, and industrial purposes are set to gain from the opening of the global economy.

These stocks are seeing increased traction as the economy recovers from the pandemic. Demand for these services is steadily growing, giving the stocks a fresh push for growth.

These companies need strong financial backing to run their extensive utility infrastructure, and the government closely regulates them as they work in the public domain.

Source: Pixabay

Here are three utility stocks that may benefit from the economic resurgence after covid.

Exelon Corporation (NASDAQ:EXC)

Exelon is involved in power generation, transmission, and delivery. It is a Fortune 100 company and has a presence in 48 countries with a market cap of US$44.8 billion.

Its revenue was US$33 billion at the end of December 2020. Cash and cash equivalent stood at US$1.1 billion, with a net cash flow of US$ 44 million.

The company pays an annual dividend of US$1.53, and it has a dividend yield of 3.39%.

The stock rose 34.30% and 23.48% in the last five years and one year, respectively. It was trading at US$45.54, down 0.24%, from the previous close on May 19, 2021. 

Source: Pixabay.

PPL Corporation (NYSE:PPL)

PPL Corp (NYSE: PPL) is headquartered in Allentown, Pennsylvania. It is one of the largest utility companies and delivers gas and electricity to its customers in the US and the UK.

The stock gained more than 14% in the last one year. It was trading at US$29.37 at the market close on May 19, 2021, which was a marginal increase of 0.14% from the previous session.

PPL has a market cap of US$22.53 billion. It pays an annual dividend of US$1.66, with a dividend yield of 5.69%.

The company continued to provide its services during the pandemic. It has invested over US$3 billion in infrastructure and donated US$2 million for Covid-19 relief efforts in 2020.

PPL has plans to acquire the National Grid's Rhode Island electric and gas utility business.

It also plans to close the deal for the purchase of Narragansett Electric by March 2022.

These deals would enable PPL to strengthen its market position.

Pinnacle West Capital (NYSE:PNW)

Pinnacle is an energy holding company serving 10 million customers in the US and the UK. It has laid around 219,000 miles of electric lines in the two countries.

Pinnacle generates 6300 MW of electricity. Its consolidated assets amount to US$20 billion. Its consolidated net income was US$35.6 million, or US$0.32 per share diluted, in the quarter ended March 2021. Its EPS is US$4.93, and the one-year price target is US$ 89.00.

The company pays an annual dividend of US$3.32, and it has a dividend yield of 3.89%.

The stock has grown 18.35% in the past year. Its customer base also had grown 2.1% in the last quarter. The company estimates the power demand to be 7521 MW in 2021. It plans to invest some US$14 billion in infrastructure and technology projects in the next five years.

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