3 Utility Stocks to Buy Ahead of Market Jitters


  • Place your bets on the most resilient ideas among utility stocks to buy.
  • Duke Energy (DUK): Duke Energy is positioned where the money will be.
  • American Water Works (AWK): American Water benefits from permanent relevance.
  • Portland General Electric (POR): Portland General also benefits from positive migration trends.
Utility Stocks to Buy - 3 Utility Stocks to Buy Ahead of Market Jitters

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While the market has enjoyed a good run, a possible consolidation warrants a closer look at utility stocks to buy. Basically, this sector is permanently relevant, enabling investors to sleep easier at night.

That’s not to say that utilities deliver guaranteed returns: they absolutely do not. However, the recent volatility in the major indices appears to suggest that Wall Street is rotating away from risk-on names. As a result, those who want to stay in the market may stand a better chance of weathering the turbulence with indelible businesses.

It doesn’t get much indelible than power and critical resources. Below are top utility stocks to buy.

Duke Energy (DUK)

The logo for Duke Energy (DUK) is seen on a sign at one of the company's offices.
Source: Jonathan Weiss / Shutterstock.com

Headquartered in Charlotte, North Carolina, Duke Energy (NYSE:DUK) operates through two segments: Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. Fundamentally, what’s attractive about Duke is its coverage map. For example, the former business unit distributes electricity in the Carolinas, Florida and the Midwest. As I’ve pointed out in prior InvestorPlace articles, many young people are moving to these regions for cost-of-living reasons.

Stated differently, Duke is positioned where the money will be. It’s a forward trajectory assumption and therefore, I’m not particularly worried about its underperformance in the charts. In the same vein, I’m not smashing the panic button on the company’s current lackluster financials. Admittedly, the average quarterly earnings for fiscal 2023 came out to 3.2% below parity.

However, experts anticipate an improvement this fiscal year, with Duke projected to print earnings per share of $5.97. That’s a notable rise from EPS of $5.56 last year. Also, revenue may reach $30.18 billion, up 3.8% from last year’s result of $29.06 billion.

Combined with a 4.25% forward dividend yield, DUK ranks among the top utility stocks to buy.

American Water Works (AWK)

A zoomed in photo of a drop of water hitting a container of water's surface.
Source: Sambulov Yevgeniy/ShutterStock.com

Centered on the regulated water segment of the utilities space, American Water Works (NYSE:AWK) provides the namesake service. This business also encompasses waste management. Further, the coverage map includes 1,700 communities in 14 states serving approximately 3.5 million active customers. Per its public profile, AWK serves multiple entities, including residential, commercial, and industrial customers.

As with other utility stocks to buy, American Water isn’t exactly lighting up the board (in a good way). Since the start of the year, AWK lost almost 10% of equity value. In the past 52 weeks, it’s down 20%. That said, a bottom may have been printed in October 2023.

While the company missed its EPS target in the first quarter last year, it began beating its bottom-line estimates from Q2 onward. For fiscal 2024, analysts anticipate EPS of $5.24, a projected improvement over 2023’s result of $4.90. Also, revenue may land at $4.42 billion, up 4.5% from last year’s $4.23 billion.

American Water offers a forward yield of 2.37%, helping to make a case for itself.

Portland General Electric (POR)

Numerous electric lines are seen at sunset.
Source: Pand P Studio / Shutterstock.com

An intriguing idea for utility stocks to buy, Portland General Electric (NYSE:POR) is an integrated electric utility. Per its corporate profile, the company engages in the generation, wholesale purchase, transmission, distribution and retail sale of electricity in the state of Oregon. It operates six thermal plants, three wind farms and seven hydroelectric facilities.

Yes, it’s Oregon-centric so that has its risks, naturally. At the same time, what I appreciate about POR stock is the underlying migration trends. Specifically, Oregon received positive net migration among college-age young adults. As with Duke Energy, Portland General could benefit from the trajectory of money: it’s situated where the greenbacks will be.

To be fair, Portland General is a risky idea because of its poor fiscal 2023 earnings performance. However, analysts see a recovery in fiscal 2024. They’re looking for EPS of $3.07 on revenue of $3.03 billion. That’s a sizable improvement over last year’s print of $2.38 EPS on sales of $2.92 billion.

Also, check out the forward yield – 4.52%. As I said, it makes for an intriguing idea for utility stocks to buy.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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