10 High Growth Utility Stocks To Invest In

2. Pampa Energia (NYSE:PAM)  

5-Year Revenue CAGR: 78.11%  

No of Hedge Fund Investors: 9  

Pampa Energia (NYSE:PAM) is one of the largest energy companies in Argentina and is involved in electricity generation, transmission, and distribution, as well as oil and gas exploration and production. The company’s diverse energy portfolio includes both conventional and renewable sources.

Pampa Energia (NYSE:PAM) has been facing significant challenges in its segments, with stagnation in key areas and limited growth potential due to infrastructure constraints and political uncertainties. The company’s Q2 results show flat growth in gas and oil production, with no new projects in power generation and an $80 million impairment loss imposed by the government. Despite challenges, Pampa Energia’s (NYSE:PAM) gas segment, which accounts for 94% of its oil and gas production, has seen a 40% increase in production levels compared to 1H23. However, this growth has been offset by falling prices, resulting in flat operating income for the segment.

The company’s oil segment has also seen slow growth, with production expanding 7% in Q2, but with a goal of ramping up production to 40-50 thousand barrels per day by 2027. The segment generated an operating income of $69 million in Q2, in line with expectations. Pampa Energia’s (NYSE:PAM) power generation segment is also facing challenges, with the government canceling all generation projects awarded in 2023 and no new mechanism in place for private players to invest in large-scale generation capacity. However, the company is completing previous projects and finishing a 130MW renewable energy project, which could provide growth opportunities.

Pampa Energia’s (NYSE:PAM) petrochemical segment has seen a 6% increase in production and a similar increase in operating profits, driven by volume growth. This segment is small but is expected to generate $40 million in operating income. Pampa Energia’s (NYSE:PAM) gas segment could see growth if the government approves plans to increase the GNK pipeline capacity, while the oil segment could see increased production if the company is able to ramp up production to its goal of 40-50 thousand barrels per day.

The power generation segment could also see growth if the government introduces a new mechanism for private players to invest in large-scale generation capacity. The petrochemical segment could continue to see growth driven by volume increases, and the company’s holdings in TGS and Transener could continue to generate equity gains. Pampa Energia (NYSE:PAM) is anticipated to experience 42.33% earnings growth this year.