雅虎香港財經 3 Utility Stocks to Keep Your Portfolio Humming Through the Slog
With the market facing uncertainties tied to economic concerns, monetary policy questions and geopolitical flashpoints (to name but a few), investors have every reason to consider utility stocks to buy. No, one shouldn’t go full bore into the sector and ignore others. However, this segment is incredibly relevant if you want to march through the slog.
Fundamentally, utilities benefit from the natural monopoly. Essentially, would-be competitors don’t even bother putting up a rival offering. With extraordinarily high barriers to entry that includes among other things steep regulations, utility companies find that their businesses are entrenched. Further, their customers have little recourse but to pay up.
It’s not an exciting industry but it should get you through the storm. On that note, below are utility stocks to buy.
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Duke Energy (DUK)
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For utility giant Duke Energy (NYSE:DUK), the core bullish narrative arguably comes down to millennial migration trends. Based in Charlotte, North Carolina, Duke provides energy resources to the Carolinas, Florida and the Midwest. These regions represent popular destination spots for young people seeking respite from soaring costs of living.
Financially, Duke is a consistently profitable enterprise. Over the last four quarters since the first quarter of 2024, the company’s average earnings per share came in at $1.45. That said, it incurred a negative earnings surprise of almost 1%, which presents a bit of a hiccup. Moving forward, though, the catalyst of the migration dynamic should allow the company to reach key fiscal targets.
For the current year, covering experts are looking for earnings of $5.97 per share on sales of $30.06 billion. Last year, the company posted EPS of $5.56 on sales of $29.06 billion. In fiscal 2025, projections call for EPS of $6.33 with a top line of $31.07 billion. With a forward dividend yield of 3.98%, DUK ranks among the utility stocks to buy.
Sempra (SRE)
Source: Michael Vi / Shutterstock.com
Based in San Diego, California, Sempra (NYSE:SRE) commands a geographic advantage. With covering over large areas of the lucrative Southern California market, it basically enjoys permanent relevance. Yes, we do hear stories about people leaving the Golden State. However, certain areas – such as Sempra’s hometown – will continue to grow for decades.
Another benefit for Sempra is that the underlying economy. California represents the economic engine of the U.S. and it will probably retain this title simply because of location. It’s an international border state along with owning some of the most important port cities. There’s a reason why so many multinational enterprises do business in California. Political bickering won’t change that.
For fiscal 2024, analysts are looking for earnings to reach $4.81 per share on revenue of $16.22 billion. That’s somewhat disappointing compared to last year’s results of $4.61 EPS on sales of $16.72 billion. However, it’s also worth pointing out that the company provides a forward yield of 3.22%. Combined with the strength of the California economic machinery, SRE is one of the top utility stocks to buy.
Portland General (POR)
Source: ESB Professional / Shutterstock.com
A lesser-known name among utility stocks to buy, Portland General (NYSE:POR) deserves consideration for its hidden-gem potential. Fundamentally, the company also benefits from migration trends. While it’s not the most favorite destination, young people are still moving to Portland in droves. By logical deduction, this dynamic should help boost the underlying utility company. After all, those folks have to get their power from somewhere.
Financially, the company incurred a choppy ride, with fiscal 2023 seeing some big misses against bottom-line targets. However, in the first quarter of 2024, Portland General managed to post revenue of $841 million. This figure easily exceeded the consensus estimate calling for $828.94 million. And that sets up POR stock nicely for meeting full-year 2024 targets.
Overall, analysts are looking for EPS of $3.07 on revenue of $3.04 billion. Last year, the utility firm delivered earnings of $2.38 per share on sales of $2.92 billion. However, with the Q1 print, it’s possible that the blue-sky sales target of $3.29 billion is on the table.
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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