10 Most Profitable Utility Stocks to Buy Now

1. Pampa Energía S.A. (NYSE:PAM)

Net Profit Margin: 33.00%

Pampa Energía S.A. (NYSE:PAM) and its subsidiaries operate in the energy sector, primarily producing oil and gas and generating electricity. The company operates in the following business segments: Transportation, Holding, Petrochemicals, Oil and Gas, and Generation. The oil and gas segment generates the majority of the revenue for the business.

Pampa Energía S.A. (NYSE:PAM)’s outstanding gas production in 2024 was fueled by solid well performance in Vaca Muerta, with average output increasing 21% year over year and representing an 80% rise since 2017. Wind energy has grown by about 50% since 2017 and is expected to reach a 95% availability rate in 2024 due to the commissioning of the PEPE 6 Wind Farm, which added 140 megawatts of clean energy capacity. EBITDA climbed 19% year on year and 29% over 2017, owing mostly to the electricity and gas businesses, assisting in the reduction of net debt to $410 million. While power units reported a 94% availability rate with improved PPA performance, gas production increased 11% year over year in Q4. The company also successfully controlled its debt, issuing a $360 million international bond maturing in 2034 and achieving its lowest net debt level since 2016, with a net leverage ratio of 0.6. Furthermore, rising activity in Sierra Chata and El Mangrullo helped to support a 16% rise in total proven reserves to 231 million barrels of oil equivalent. The company’s net profit margin surged by 33.00%, making it the  Best Utility Stock. 

Pampa Energía S.A. (NYSE:PAM)’s price target was increased by JPMorgan from $59 to $93.50. Despite the recovery, JPMorgan remains optimistic about Argentina’s oil and gas industry and believes there is still room for growth in the area. The analyst informs investors in a research note that the sector has changed under the new government due to major reforms, such as oil deregulation, incentives, and fuel prices that are in line with international parity. It believes that it is not too late to invest in the group.

Overall, PAM ranks first among the 10 Most Profitable Utility Stocks to Buy Now. While we acknowledge the potential of Utility companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PAM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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