4 Top Utility Stocks To Watch This Week
As the stock market braces for headwinds from geopolitical uncertainty and inflationary pressures, investors could be turning towards defensive sectors. As such, utility stocks could be one to consider as they are usually better equipped to weather market volatility. This is because utility stocks consist of companies that provide essentials such as water, electricity, and gas. On top of that, demand for these utilities is likely stable even during periods of war or inflation. Besides, utility companies are able to offer strong dividends thanks to their steady flow of income, making them a safe pick for investors.
Investors may be looking at the likes of Dominion Energy (NYSE: D). In March, the energy company received approval from the Virginia State Corporation Commission to add 1,000 megawatts of carbon-free electricity to its generation portfolio. In particular, the approved expansion includes 15 projects which the company will complete in 2022 and 2023. Apart from Dominion, we have Essential Utilities (NYSE: WTRG). The company recently acquired the wastewater system of Lower Makefield Township. The wastewater system, costing $53 million, serves approximately 11,000 customer connections in townships throughout Pennsylvania. And on that note, check out these four utility stocks in the stock market today.
Utility Stocks To Buy [Or Sell] This Week
- NextEra Energy Inc. (NYSE: NEE)
- California Water Service Group (NYSE: CWT)
- Sempra Energy (NYSE: SRE)
- Vidler Water Resources Inc. (NASDAQ: VWTR)
NextEra Energy
NextEra Energy is a renewable energy company that owns the largest rate-regulated electric utility in the U.S., Florida Power & Light Company (FPL). FPL serves more than 5.6 million customer accounts, supporting more than 11 million residents across Florida with clean, reliable, and affordable electricity. It also owns a competitive clean energy business, NextEra Energy Resources (NEER), which is one of the largest generators of renewable energy from the wind and sun and a world leader in battery storage. Through its subsidiaries, NextEra generates clean, emissions-free electricity from seven commercial nuclear power units in Florida, New Hampshire, and Wisconsin.
Last week, NextEra reported its first-quarter 2022 financial results. For starters, the company brought in net revenue of $2.89 billion, most of which came from its FPL segment. As for its profits, NextEra reported adjusted earnings of $1.46 billion for the quarter, an increase from last year’s $1.33 billion. Accordingly, this translates to earnings of $0.74 per share and $0.67 per share respectively. As for NextEra’s 2022 outlook, it expects adjusted earnings per share to be in the range of $2.75 to $2.85. And for 2023 through 2025, the company expects to grow roughly 6% to 8% per year off the expected 2022 adjusted earnings per share. Given this, will you be watching NEE stock?
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California Water Service Group
Following that, we have California Water Service Group or CWT for short. For a sense of scale, the company provides high-quality water and wastewater services to more than two million people in over 100 communities through its five subsidiaries. These subsidiaries include California Water, Hawaii Water, New Mexico Water, Washington Water, and Texas Water. Therefore, it is unsurprising that CWT is the third-largest publicly traded water utility company in the U.S. CWT stock has been trading sideways over the past year. Could things be turning around soon?
On Monday, its New Mexico Water subsidiary successfully closed the acquisition of Morningstar Water System from Animas Valley Land and Water (AV Water). As such, this acquisition will now allow New Mexico Water Service to deliver high-quality water services to Morningstar customers. Moreover, it will also add 2,000 customers to New Mexico Water’s customer base. Apart from that, CWT’s Washington subsidiary recently signed an agreement to acquire the water assets of Stroh’s Water Company, which will add 900 customers to its customer base. All in all, CWT has been making steady efforts to increase its customer base. As CWT’s customer base continues this uptrend, will you be eyeing CWT stock?
Sempra Energy
Another top utility stock to watch is Sempra. For the most part, it is a North American energy infrastructure company that focuses on electric and natural gas infrastructure. For a sense of scale, Sempra hires approximately 20,000 employees and serves more than 40 million consumers worldwide. Its operating companies include Southern California Gas Company and San Diego Gas & Electric to name a few. Since the start of 2022, SRE stock has risen in value by nearly 30%.
Late in March, Sempra and French oil major TotalEnergies agreed to expand their collaborations on LNG and wind projects. This collaboration aims to improve the energy supply and help cut Europe’s reliance on Russian oil and gas imports. Evidently, it seems that U.S. exporters are stepping up as Europe looks for alternative energy sources following the sanctions on Moscow. CEO Jeffrey Martin added, “With last week’s energy accord between the U.S. and European Commission, alliances between some of the leading energy companies like TotalEnergies and Sempra are increasingly important to transatlantic trade and energy security.” With that being said, should you invest in SRE stock?
Vidler Water
Finishing off our list of utility stocks today is Vidler Water Resources, or Vidler for short. Essentially, it is a water resource company that focuses on developing reliable water supply in geographic areas lacking available water resources. Vidler provides water development solutions for end-users by identifying, acquiring, and developing water rights, often within fragmented agricultural markets. Over time, the company will convert these water rights to higher valued municipal and industrial uses. In the past year, VWTR stock has increased over 75% in price.
Last month, the water resource company reported its financial results for the fourth quarter ended December 31, 2021. For starters, it raked in $23.44 million for the quarter, a stark year-over-year increase from the $3.46 million in 2020. This massive differential is thanks to the company’s significant sale of 55,000 long-term storage credits (LTSC) from its storage facility in Arizona. The sale generated approximately $22 million in revenue for Vidler. Besides, net income came in at $33.68 million, triple the amount of $10.1 million in the prior year. Given the strong quarterly performance, should you invest in VWTR stock?
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