4 Top Utility Stocks To Watch Right Now
Utility stocks have long been a staple of investment portfolios for stock market investors. This is because historically utility stocks have offered reliable income and modest growth potential. However, with rising interest rates expected to continue throughout the remainder of 2022, utility stocks may come under pressure. This could present an opportunity for investors to buy top utility stocks at a discount. In general, Utility stocks are sensitive to changes in interest rates, as higher rates can lead to lower valuations. As a result, utility stocks may be a more speculative investment going forward.
For investors who are interested in utility stocks, it may be worth considering some of the more defensive names in the sector. These companies tend to have strong balance sheets and dividend coverage ratios, which can help to protect against a decline in valuations. Though it’s important to note that utility stocks may not offer the same potential for capital appreciation as other sectors. However, they still offer an attractive income stream for investors who are willing to accept a higher level of risk. With this in mind, here are four trending utility stocks to watch for your long-term portfolio.
Utility Stocks To Buy [Or Avoid] Today
- Xcel Energy Inc. (NASDAQ: XEL)
- Duke Energy Corporation (NYSE: DUK)
- NextEra Energy, Inc. (NYSE: NEE)
- DBA Sempra (NYSE: SRE)
Xcel Energy (XEL Stock)
First, Xcel Energy (XEL) is a utility holding company based in Minneapolis, Minnesota. In brief, the company supplies electricity to residential, commercial, and industrial customers through its operating companies. For a sense of scale, Xcel services more than 3.7 million electric customers and 2.1 million natural gas customers in eight states. Just last month, XEL announced its Board Of Directors declared a quarterly dividend on its common stock of 48.75 cents per share.
In addition to that, XCEL Energy reported its second-quarter 2022 fiscal results. Diving in, the company posted earnings of $0.60 per share, on revenue of $3.4 billion. For context, Wall Street’s consensus estimates for the quarter were earnings of $0.60 per share and revenue of $3.1 billion. Next, the company posted an 11.6% increase during the same period, in 2021. Aside from that, Xcel Energy reaffirmed its guidance. In detail, the company reported that it continues to estimate 2022 earnings of $3.10 to $3.20 per share.
Year-to-date shares of XEL stock have outperformed the broader market having jumped 12.75% so far in 2022. Meanwhile, as of Wednesday afternoon XEL stock is up another 2% at $76.64 per share. With that, is XEL stock a top utility stock to watch right now?
Duke Energy Corporation (DUK Stock)
Next, Duke Energy Corporation (DUK) is an American electric power holding company headquartered in Charlotte, North Carolina. The company is the largest electric power holding company in the United States. For a sense of scale, Duke Energy provides electricity services for over 8.2 million customers, as well as 1.6 million natural gas customers. Currently, DUK shareholders enjoy an annual dividend of 3.66%. Just last month, the company announced its Q2 2022 financial results.
In the report, Duke Energy posted earnings per share of $1.14 per share, with revenue of $6.7 billion. This is compared to analysts’ consensus estimates for Q2 of $1.10 earnings per share, and revenue of $5.9 billion. Furthermore, Duke Energy saw a 16.1% jump in revenue during the same period, a year prior. With that, shares of DUK stock are up over 6% since the start of 2022. Meanwhile, on Wednesday afternoon, DUK stock is trading at $109.95 per share. All in all, will you be adding DUK stock to your radar today?
NextEra Energy (NEE Stock)
Following that, NextEra Energy Inc. (NEE) is a US-based power company. For starters, the company delivers electricity to more than 5.8 million customers. In addition to that, NextEra Energy is the largest generator of renewable energy from the sun and wind in the world. The company operates through three segments: NextEra Energy Resources, NextEra Energy Services, and NextEra Energy Partners. As it stands today, NEE has an annual dividend yield of 1.89%. Moving along, at the end of July NextEra Energy delivered better-than-expected second-quarter 2022 financial results.
Getting straight to it, the company posted Q2 2022 earnings per share of $0.81. Meanwhile, NEE reported revenue of $5.2 billion for the quarter. This is versus Wall Street’s estimates of $0.75 earnings per share, on revenue of $5.2 billion. What’s more, NextEra Energy reported a 32% increase in revenue in Q2 versus the same period in 2021.
Aside from that, NEE commented in its presentation to shareholders that it reaffirms its full-year 2022 fiscal earnings of $2.80 to $2.90 per share. As as well providing a forecast for 2023 earnings in the range of $2.98 to $3.13 per share. During the last 6 months of trading action, shares of NEE stock have rebounded by over 6%. On Wednesday afternoon NextEra Energy stock is up another 2% and is trading at $89.89 per share. Considering this, is NEE stock a good investment for your long-term portfolio?
Sempra (SRE Stock)
Last but not least, Sempra (SRE) Sempra is a holding company for Sempra Energy. In brief, Sempra Energy is one of the largest energy utilities companies in the world. Sempra Energy’s businesses include Sempra Utilities, Sempra International, Sempra Renewables, and Sempra LNG. Sempra Utilities is the holding company’s regulated electric and gas utility business, which Sempra Energy operates in Southern California through its subsidiary, San Diego Gas & Electric Company (SDG&E). Today, SRE has an annual dividend yield of 2.64%. In August, Sempra reported a beat for its second quarter 2022 financial results.
Diving in, SRE announced Q2 2022 earnings of $1.98 per share, with revenue of $3.5 billion. Compared to, analysts’ consensus estimates for the quarter of EPS of $1.82 and revenue of $2.9 billion. Moreover, the company displayed a 29.4% increase in revenue during the same period, in 2021. Furthermore, the company reported it now estimates 2022 full-year earnings to come in on the high-end of its previously reported guidance range of $8.10 to $8.70 per share.
Separate from that, shares of SRE have outperformed the broader market having jumped over 31% so far in 2022. Meanwhile, SRE stock is up another 3% during Wednesday afternoon’s trading session at $173.41 per share. With this in mind, do you think SRE is a good utility stock to buy right now?