Top Utilities Stocks, Forecasts and Returns

If you want to invest in shares on utilities and you are looking for companies that operate in this sector, then you are in the right place.

In this article we will see together a list of companies operating in the sector of public utilityand I’ll give you mine later opinions personal on a can investment in these companies.

Il utilities sector includes within it the companies operating in the field ofprovision of services such as water, electricity and gas.

These are relatively companies ESTABLISH since they are only slightly affected by market fluctuations, precisely because they constitute services of an essential nature.

In fact, the demand for these services will never fail, as they are utilities that are needed.

The only “danger” is represented by the cost of the raw material which is used to provide certain services (petrolium o natural gas for example), even if to tell the truth, the increases in the prices of raw materials are then “borne” by the final consumers, who are affected by an increase in utilities, while from the point of view of the investment they are advantageous.

If you’re ready, let’s get started!

Best shares on utilities

Now let’s see which companies are particularly suitable for an investment. But first I suggest you fill out the quiz below to find out what type of investor you are and identify the best investments for you.

NextEra Energy

We are talking about one American energy company with 2020 revenues of $18 billion. It was founded in 1984 and is based in Florida.

We are facing a industry giantwith a market capitalization of $153.29 billion, which produces and distributes electricity to approximately 12 million customers.

One of its strengths is the solidity of the dividends A share of it costs about $75, and since graphic we can see how it is growing in the last year, with peaks reached in September 2022.

The company has performed over the years several acquisitionsthe last of which took place in early 2019 for 6.4 billion dollars: the company buys is the Gulf Power Company, the largest electricity producer in northwest Florida.

American Water Works Company

It is the largest publicly traded American company dealing with water services and waste water.

It really is a colossussince it services 14 states.

The company was founded in 1866 and reorganized under its current name in 1947.

Its headquarters is Camden, New Jersey.

It has a market capitalization of $28.50 billion, and currently costs about $146 per share.

His goal is to increase his earnings per shareat a compound annual rate of 7% to 9%, between 2023 and 2027. This could make it one of the fastest growing utilities companies in the country.

It is also important to point out that the company has been continuing its growth streak for 14 consecutive years dividends.

AES

It is a company that generates and distributes electric energybased in Arlington at Virginia. It is also one of the main ones electricity companies of the world.

there is a market capitalization very high, amounting to 15.72 billion dollars. A very important project that sets it apart is the one launched in 2018: Fluence.

It’s about a joint venture between AES and Siemens, focused on the development and expansion of energy storage technologies and services, which aims to implement AES’s extensive research on the potential of lithium-ion powered energy sources by relying on Siemens’ extensive global presence in the industrial sector.

A share costs about $23, so we’re talking about a very cost-effective investment, and its returns are fairly constant.

National Grid

It’s a company multinational electricity and gas utility company based in London and was founded in 1990.

Its principal activities are in the United Kingdom, where it owns and operates the electricity and natural gas transmission grids, and also operates in the northeastern United States.

In 2000 the company began to expandmaking new acquisitions that have allowed it, among other things, to double in size.

Starting from 2019 also, the company began to invest more than $3.5 billion a year in infrastructure in the United States, while in previous years it had increased its investments in cleaner and greener technologies.

Its market capitalization is $42 billion, with a price/earnings ratio of 13.33.

Since the beginning of the year, the company has recorded a +14.36%.

NRG Energy

It is a large American energy company headquartered in Texas, precisely in Houston. It was founded in 1992 and owns e manages power generation plants. It operates mainly in the United States.

The company has also acquired 11 other energy companies, both manufacturing and retail, initiating a major acquisition campaign.

As sub-sectors, it includes generation nuclear, wind and solar generation.

His predictions are greatly influenced by volatility: Actions NRG Energy in fact, they have a downward trend, even if they have experienced a positive season starting above all from May 2021.

Since the beginning of the year the performance has been positive, with a +5.57% recorded.

For the implication it has with the volatility, it is more suitable for an investor who is very inclined to risk, who is not afraid of losing his capital.

One share costs about US$33.

How to buy shares in utilities

Thanks to the web, it is technically simple to buy shares and invest.

You can do this by relying on your traditional bank, which allows you to open an account to be used for the purchase and sale of shares, or by relying on online platforms.

Keep in mind that banks charge higher fees and commissions than platforms. If you have never made investments of this type, I suggest you read the guide on best securities deposits with and without current account.

Should you invest in utilities stocks?

We have reached the end of our discussion, and now we can reason together to understand whether including one or more companies in the public utility sector in the portfolio could be a good choice to make.

The utilities sector, as we have seen, is a very particular sector for several reasons:

• It suffers little from volatility;
• It’s about companies ESTABLISH;
• Often in the United States such companies operate under the scheme monopoly o oligopoly;
• Corporations are protected by a natural barrier to entry due to the huge investments that competitors would have to make to enter this market;
• The companies offer services of essential nature.

This therefore makes the sector very different from all the other sectors present on the Stock Exchange.

Securities of this kind are very suitable for an investor who is looking for one some stability in the wallet, especially in amedium-long term perspective.

The defensive characteristics in this sector, in fact, make it the most suitable for portfolio protection and for an investment that generates returns, but which also offers protection.

The moment we are experiencing, although the economic recovery has begun, however does not allow us to live in peace.

The phase of market uncertainty is around the corner, mainly due to fears about the growth of inflation and the infections from covid-19 which could start to rise again. Precisely for this reason many investors are thinking of defensive stocks, of which utilities are the emblem.

In fact, even in the past, they have always shown good resistance in phases of growth of inflation, and when the economic phase was marked by a period that was not too flourishing.

Invest in the utilities sector therefore it is recommended for patient investors who are looking for a defensive component to include in their portfolio to deal with a situation of instability and increased volatility.

As we have seen, these are very large and solid companies, often operating with little competition, and in a mostly stable industry where entry barriers are very high.

The challenge for these companies is represented by the green deal, towards which all countries are heading: that is, making investments to make their energy greener.

This translates into huge investments that the companies will have to make, above all in the water service, in theclean energy and in decarbonization.

All in all, the sector is suitable for investors looking for stability, and with a view to diversifying your portfolio, including a stock or stocks from the utilities sector can only help you secure your portfolio.

I cannot therefore give you a certain answer, but, as you could guess, my idea tends towards a positive answer.

If you really want to start investing in the stock market, I leave you this guide which in my opinion could be very useful for you.

Other resources

If you want to dig deeper into this topic, here are some other guides:

Plus, here’s more reading to learn more:

See you soon!