5 Utility Stocks Outperforming The Market
CEG stock has been outperforming thanks to the company’s position in the growing carbon-free energy market, strong performance in nuclear and renewables, and recent favorable developments like a significant federal loan and a pending acquisition of Calpine. Wall Street is bullish about the company's growth prospects, driven by increasing demand for clean power from residential, business, and especially the booming data center and AI sectors.
#3. Clearway Energy
Market Cap: $7.2B
YTD Returns: 38.5%
Clearway Energy (NYSE:CWEN) owns, develops and operates clean energy projects, including wind, solar, and battery storage systems across the United States. It is a leading independent power producer with a large portfolio of clean energy assets and also owns conventional power capacity to ensure grid reliability. Clearway aims to provide investors with stable and growing dividend income through its contracted clean energy portfolio.
The stock has been benefiting from a combination of a strong project pipeline, consistent dividend growth, and a strong focus on renewable energy. The company also benefits from long-term contracts and is well-positioned in the growing renewable energy sector, which includes solar, wind, and battery storage projects. With a generous 5.0% yield, CWEN is supported by a robust dividend with a history of increases, which attracts income-oriented investors.
#4. American Electric Power Company
Market Cap: $65.0B
YTD Returns: 32.3%
American Electric Power (NASDAQ:AEP) generates, transmits, and distributes electricity for customers in 11 states. AEP is a large, vertically integrated utility holding company that operates a diverse portfolio of generating facilities, manages the nation's largest electric transmission system, and maintains a vast distribution network to deliver power to homes and businesses. It also offers competitive energy solutions and engages in wholesale energy trading.
After a long period of underperformance, AEP stock has come alive thanks to robust demand for electricity, driven by data centers and industrial growth, which is supported by a robust capital plan. The company's strong performance is also reflected in positive momentum, with significant growth in EPS and EBITDA, and a solid dividend at 3.1%.
#5. Atmos Energy
Market Cap: $28.1B
YTD Returns: 26.0%
Atmos Energy (NYSE:ATO) is a natural gas-only distributor that safely delivers natural gas to millions of residential, commercial, and industrial customers. The company's main activities include the transmission, distribution, and storage of natural gas, as well as purchasing it from producers and marketers to meet customer demand. Atmos Energy operates in over 1,400 communities across eight states in the United States.
This company has been showing consistent earnings growth, significant investment in infrastructure for safety and reliability, a strong financial position with lower-than-average debt, and a history of increasing dividends. Atmos’ stable, regulated business model, expanding customer base, and strategic capital expenditures have all been contributing to its strong performance.
By Alex Kimani for Oilprice.com
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