The utility sector comprises companies that provide essential services like electricity, water, and natural gas. These firms operate in regulated markets, often with government-approved pricing structures. Utility stocks represent ownership in these companies. They are known for stability and consistent dividend payments. The sector is considered defensive, often performing well during economic downturns.
Investing in utility stocks offers several potential benefits. They typically provide steady income through dividends. Utilities tend to have predictable cash flows due to their regulated nature. These stocks can add stability to a portfolio during market volatility. However, utility stocks also have drawbacks. They may offer limited growth potential compared to other sectors. Rising interest rates can negatively impact utility stocks. Regulatory changes and environmental concerns can affect the sector’s profitability.
When considering utility stocks, investors should examine factors beyond just dividend yield. Look at the company’s regulatory environment and potential for rate increases. Consider the utility’s infrastructure investments and adaptation to renewable energy trends. Be aware of the impact of interest rates on utility stock prices. Remember that while utilities are generally stable, they are not immune to market forces. With this on top of mind, here are two utility stocks to watch in the stock market right now.
Utility Stocks To Buy [Or Avoid] Right Now
- Vistra Corporation (NYSE: VST)
- NRG Energy Inc. (NASDAQ: NRG)
Vistra Corp (VST Stock)
To initiate, Vistra Corporation (VST) is an integrated retail electricity and power generation company. They produce and sell electricity and related products to residential, commercial, and industrial customers. Vistra operates a diverse portfolio of power plants, including natural gas, coal, nuclear, and renewable energy facilities.
Just this week, Vistra Corp reported its Q2 2024 financial and operating results. The company announced earnings of $0.90 per share, with revenue of $3.85 billion for the second quarter of 2024. This comes in versus analysts’ estimates for the quarter which were earnings of $1.59 per share, and revenue of $4.04 billion. Though, revenue gained by 20.57% on a year-over-year basis.
Year-to-date, shares of VST stock have gained by a whopping 104.26%. While, during Friday’s late morning trading session, Vistra Corp is trading red on the day by 1.72% at $77.72 a share.
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NRG Energy (NRG Stock)
Next up, NRG Energy Inc. (NRG) is a large American energy company. They generate electricity and provide energy-related products and services to both residential and commercial customers. NRG operates a diverse power generation portfolio, including conventional and renewable sources. The company also offers home services, portable power solutions, and is involved in electric vehicle charging infrastructure.
Also this week, NRG Energy announced its second quarter 2024 financial results. In detail, the company reported earnings per share of $1.48, on revenue of $6.66 billion for Q2 2024. This came in versus Wall Street’s estimates for the quarter which were earnings of $1.30 per share, and revenue estimates of $4.48 billion.
In 2024 so far, shares of NRG Energy stock have jumped higher by 53.25% YTD. Meanwhile, during Friday’s late morning trading session, NRG stock is trading higher on the day up 0.76%, currently trading at $78.56 a share.
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