5 Best Electric Utility Stocks To Buy Now

In this article, we discuss 5 best electric utility stocks to buy now. If you want to see more stocks in this selection, check out 10 Best Electric Utility Stocks To Buy Now. 

5. DTE Energy Company (NYSE:DTE)

Number of Hedge Fund Holders: 34

DTE Energy Company (NYSE:DTE) is involved in utility operations. Its Electric segment is responsible for producing, purchasing, distributing, and selling electricity to over 2.3 million customers in southeastern Michigan. The electricity is generated using a variety of sources, including fossil fuels, hydroelectric pumped storage, nuclear plants, and wind and solar assets. It is one of the best electric utility stocks to watch. DTE Energy Company (NYSE:DTE) paid a $0.9525 per share quarterly dividend to shareholders on April 15. 

On April 10, BMO Capital’s analyst James Thalacker increased the price target for DTE Energy Company (NYSE:DTE) to $124 from $123, while maintaining a Market Perform rating. The firm has lowered its Q1 EPS estimate by 70c to $1.24 due to the impact of severe storms, mild weather, and a lower EM&T contribution. However, the change in the price target is due to the updated view of mark-to-market in group peer multiples, the analyst wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 34 hedge funds were long DTE Energy Company (NYSE:DTE), compared to 30 funds in the last quarter. Ken Griffin’s Citadel Investment Group is the biggest position holder in the company, with 1.7 million shares worth approximately $202 million. 

4. FirstEnergy Corp. (NYSE:FE)

Number of Hedge Fund Holders: 36

FirstEnergy Corp. (NYSE:FE) generates, transmits, and distributes electricity through its subsidiaries. The company operates in two segments, Regulated Distribution and Regulated Transmission. FirstEnergy Corp. (NYSE:FE) owns and runs various power generating facilities, including coal-fired, nuclear, hydroelectric, wind, and solar. On March 22, the company declared a quarterly dividend of $0.39 per share, in line with previous. The dividend is distributable on June 1, to shareholders of record on May 5. It is one of the best electric utility stocks to buy. 

On March 28, Mizuho analyst Anthony Crowdell maintained a Neutral rating on FirstEnergy Corp. (NYSE:FE) and decreased the price target on the shares from $42 to $40. The appointment of Brian Tierney as CFO is considered appropriate given his expertise in handling Ohio regulations and his strong rapport with the company’s board, the analyst told investors. The firm had anticipated the stock to rise on the news and believed the slight underperformance was due to the removal of any takeover premium. As a result, the price target was lowered to reflect current market multiples.

According to Insider Monkey’s fourth quarter database, 36 hedge funds were long FirstEnergy Corp. (NYSE:FE), compared to 41 funds in the prior quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors is the largest stakeholder of the company, with 3.6 million shares worth $151.5 million.

Here is what ClearBridge Investments Global Infrastructure Income Strategy has to say about FirstEnergy Corp. (NYSE:FE) in its Q4 2021 investor letter:

“On a regional level, the Strategy’s largest exposure is in the U.S. and Canada (44%), consisting of regulated and contracted utilities (31%) and economically sensitive user-pays infrastructure (13%).

During the quarter we initiated new positions in U.S. electric utility FirstEnergy.  With supply chain issues, higher housing costs, higher commodity prices and producer price inflation remaining square in the sights for 2022, we think higher inflation is a risk for global markets. We expect growth to slow to trend or below by mid-2022 and U.S.”

3. Dominion Energy, Inc. (NYSE:D)

Number of Hedge Fund Holders: 41

Dominion Energy, Inc. (NYSE:D) is an American energy company that produces and distributes energy. It has four operating segments – Dominion Energy Virginia, Gas Distribution, Dominion Energy South Carolina, and Contracted Assets. Dominion Energy Virginia generates, transmits, and distributes electricity to about 2.7 million residential, commercial, industrial, and governmental customers in Virginia and North Carolina. It is one of the best electric utility stocks to invest in. Dominion Energy, Inc. (NYSE:D)’s board of directors approved a 2023 dividend rate of $2.67, subject to quarterly determination and declaration by the board.

On March 7, UBS reiterated a Neutral rating on Dominion Energy, Inc. (NYSE:D) and trimmed its price target on the shares to $57 from $60. The Virginia legislature passed a comprehensive utility reform bill last month, and the analyst believes the parameters are now set for the next phase of Dominion Energy, Inc. (NYSE:D)’s business review. While the firm thinks a blueprint is in place to address long-standing issues for the stock, it anticipates that execution risk will lead the stock to trade at a double-digit discount on its estimates.

According to Insider Monkey’s fourth quarter database, 41 hedge funds were long Dominion Energy, Inc. (NYSE:D), compared to 29 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is the largest stakeholder of the company, with 3.80 million shares worth $233.5 million. 

Diamond Hill Large Cap Strategy made the following comment about Dominion Energy, Inc. (NYSE:D) in its Q4 2022 investor letter:

“Other bottom contributors included media and technology giant Alphabet, apparel and footwear company V.F. Corporation and utility operator Dominion Energy, Inc. (NYSE:D). Dominion Energy’s stock price weakness was due in part to regulatory concerns surrounding its triennial rate review process and its offshore wind program. Additionally, management highlighted cost pressures, which could hamper growth rates. We believe these headwinds are short-term in nature and continue to hold our position.”

2. PG&E Corporation (NYSE:PCG)

Number of Hedge Fund Holders: 52

PG&E Corporation (NYSE:PCG) provides electricity and natural gas to customers in the northern and central regions of California. The company generates electricity using various sources, such as nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic. PG&E Corporation (NYSE:PCG) is one of the best electric utility stocks to invest in. The company provided an update on its earnings per share (EPS) guidance for 2023 on February 23, stating that GAAP earnings are expected to fall within the range of $0.98 to $1.13, while non-GAAP core earnings are projected to lie within the range of $1.19 to $1.23 per share. This is in comparison to the market consensus of $1.22 per share.

On April 3, Ladenburg analyst Paul Fremont initiated coverage of PG&E Corporation (NYSE:PCG) with a Buy rating and a $20.50 price target. Fremont believes that the California wildfire fund worth $20 billion will cover the near-term fire exposure and after the completion of the company’s plan to put 10,000 miles of distribution lines underground, it will “effectively eliminate its exposure to wildfires.” The analyst also believes that the current level of rate base investment will support the firm’s forecast of 10% EPS growth through 2025.

According to Insider Monkey’s fourth quarter database, 52 hedge funds were long PG&E Corporation (NYSE:PCG), compared to 46 funds in the earlier quarter. Dan Loeb’s Third Point is the largest stakeholder of the company, with 59 million shares worth $960.5 million. 

ClearBridge Global Infrastructure Value Strategy made the following comment about PG&E Corporation (NYSE:PCG) in its Q4 2022 investor letter:

“Turning to the U.S. and Canada, U.S. electric utility PG&E Corporation (NYSE:PCG) and U.S. water company American Water Works (AWK) also made strong contributions. PG&E is a regulated utility operating in central and northern California that serves 5.3 million electricity customers and 4.4 million gas customers in 47 of the state’s 58 counties. PG&E outperformed given several positive catalysts: it was included in the S&P 500 Index, the Fire Victim’s Trust sold some of its stake in the company, easing a market overhang, and the company displayed evidence of its operational improvements, with no major fires seen so far this fire season.”

1. NextEra Energy, Inc. (NYSE:NEE)

Number of Hedge Fund Holders: 61

NextEra Energy, Inc. (NYSE:NEE) and its affiliated companies produce, transport, distribute, and market electricity to individual and business customers in North America. The company utilizes various sources, including wind, solar, nuclear, coal, and natural gas facilities to generate electricity. It also designs, constructs, and manages long-term renewable energy assets such as wind and solar power facilities, energy storage projects, and electricity transmission systems. It is one of the best electric utility stocks to invest in. 

On March 28, Erste Group analyst Stephan Lingnau upgraded NextEra Energy, Inc. (NYSE:NEE) to Buy from Hold. The company’s operational profit has reportedly increased by 6% YoY in 2022, and the analyst expects that its dividend will rise by approximately 10% annually for this year and the next. 

According to Insider Monkey’s fourth quarter database, 61 hedge funds were bullish on NextEra Energy, Inc. (NYSE:NEE), compared to 73 funds in the earlier quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the largest stakeholder of the company, with 2 million shares worth nearly $169 million. 

ClearBridge Investments made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2022 investor letter:

“NextEra Energy, Inc. (NYSE:NEE) is an integrated utility business with a regulated utility operating in Florida and the largest wind business in the U.S. NextEra’s regulated business includes Florida Power & Light, which serves nine million people in Florida. NextEra’s share price rose along with the passage of the U.S. Inflation Reduction Act, which considerably expands support for renewable energy.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 10 Best Education Stocks To Buy In 2023 and 10 Best Telecom Dividend Stocks To Buy for 2023.