Three Utility Stocks To Watch In 2021

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Three Utility Stocks To Watch In 2021

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 Three Utility Stocks To Watch In 2021

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Summary

  • Shares of Florida-based energy company NextEra grew nearly 28 percent in 2020.
  • American Water Works Company’s net income jumped 14 percent in 2020.
  • Brookfield Infrastructure’s funds from Operations surged to US$1.45 billion.

Utility companies provide electricity, water, natural gas, and wastewater management services, key necessities that drive the economy. Many companies in this sector have reported significant earnings in 2020 as the demand for these services grew.

Here, we explore three utility companies listed on NYSE – NextEra Energy, American Water Works Company and Brookfield Infrastructure. These companies reported earnings growth in 2020 and saw their share price grow over the period.

Pic Credit: Pixabay.

NextEra Energy, Inc. (NYSE: NEE)

The Florida-based electric utility company posted around 10.5 percent year-over-year growth in its adjusted earnings to U$4.55 billion, or U$2.31 per share.

However, NextEra’s GAAP net income declined to US$2.92 billion, or US$1.48 per share, from US$3.77 billion, or US$1.94 per share, in 2019. The company’s clean energy business NextEra Energy Resources wrote down US$1.2 billion on its investment in Mountain Valley Pipeline.

For 2021, NextEra expects its adjusted EPS in the range of US$2.40 to US$2.54. And for 2022 and 2023, the company projects a 6 percent to 8 percent growth from 2021 level. NextEra is forecasting its 2022 adjusted EPS in the range of US$2.55 to US$2.75 while it is expected to grow to the range of U$2.77 to U$2.97 in 2023.

NextEra, which owns Florida Power & Light Company, commissioned approximately 5,750 MW of wind, solar and storage project in 2020. The company has set a target to construct about 23 to 30 GW of new renewables by 2024. Shares of NextEro grew almost 28 percent in 2020.

Image Source: Refinitiv, NextEra share price in 2020.

American Water Works Company, Inc. (NYSE: AWK)

American Water Works Company’s net income during the year ended Dec. 31 increased 14 percent year-over-year to US$709 million, or US$3.91 per share, from US$621 million, or US$3.43 per share 2019.

For 2021, the New Jersey-based water and wastewater utility company forecasts its EPS in the range of US$4.18 to US$4.28 per share while it is expected to grow by 10 percent by 2025.

American Water Works plans to invest between US$10.3 and US$10.5 billion by 2025. By 2030, the company eyes to invest around US$22 billion to US$25 billion.

The company also projects its dividend to grow by 10 percent by 2025. The shares of American Water Works grew around 25 percent in 2020.

Brookfield Infrastructure (NYSE: BIP)

Brookfield Infrastructure’s net income in 2020 grew to US$394 million, or 35 cents per unit, from US$233 million, or 6 cents per unit in 2019. The Canadian company owns and operates utilities, transport, midstream and data sectors in North America.

Funds from Operations (FFO) came in at US$1.45 billion, up 5 percent from US$1.38 billion in the previous year. FFO from utilities segment rose 6 percent to US$659 million.

Brookfield Infrastructure recently agreed to sell its North American district energy business Enwave Energy Corp. for a total consideration of US$4.1 billion on an enterprise value basis. Shares of Brookfield Infrastructure rose around 10 percent in 2020.

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