10 Most Undervalued Utility Stocks to Invest in Now

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

Forward P/E as on March 4: ~19.4x

Number of Hedge Fund Holders: 84

NextEra Energy, Inc. (NYSE:NEE) is engaged in generating, transmitting, distributing, and selling electric power to retail and wholesale customers. Analyst David Arcaro from Morgan Stanley gave a “Buy” rating on the company’s stock and raised the price objective to $94.00 from $93.00. The rating was backed by several positive factors, highlighting a strong outlook for NextEra Energy, Inc. (NYSE:NEE). The company is expected to witness a marginal increase in EPS, courtesy of a strong renewables backlog and potential new contracts, mainly in the area of renewable energy projects.

The analyst has also highlighted the potential upside opportunities including the possible restart of the Duane Arnold nuclear plant, multi-year renewable contracts, as well as new natural gas power plant projects. Amidst challenges including policy changes and equipment supply risks, the broader financial outlook remains stable for NextEra Energy, Inc. (NYSE:NEE). Its healthy operational performance and competitive electric rates strengthen the analyst’s Buy rating. Overall, the growth in the utilities sector, due to higher electricity demand and a pivot to renewable energy, is expected to support NextEra Energy, Inc. (NYSE:NEE) as it enhances its clean energy portfolio and investments towards infrastructure.

Madison Investments, an investment advisor, released its Q3 2024 investor letter. Here is what the fund said:

“The top contributors in the quarter were NextEra Energy, Inc. (NYSE:NEE), Oracle Corporation, Progressive Corporation, Equifax Inc., and United Healthcare. NextEra has continued to perform well given its strong position in the renewable energy space, increasing demand for power, its transmission capabilities, as well as a tailwind from lower interest rates.”