5 Best Electric Utility Stocks To Invest In

2. PG&E Corporation (NYSE:PCG)

Number of Hedge Fund Holders: 51

PG&E Corporation (NYSE:PCG) is a California-based company that delivers electricity and natural gas to customers in northern and central California. The company generates electricity using nuclear, hydroelectric, fossil fuel, fuel cell, and photovoltaic sources. PG&E Corporation (NYSE:PCG) is one of the elite utility stocks to monitor. 

On October 7, RBC Capital analyst Shelby Tucker raised the price target on PG&E Corporation (NYSE:PCG) to $19 from $16 and maintained an Outperform rating on the shares. The analyst is “encouraged” by PG&E Corporation (NYSE:PCG)’s wildfire mitigation efforts and latest positive catalysts, such as the firm’s inclusion in the S&P 500. 

According to Insider Monkey’s second quarter data, 51 hedge funds were long PG&E Corporation (NYSE:PCG), with collective stakes worth $2.6 billion, compared to 51 funds in the prior quarter worth $3.2 billion. Dan Loeb’s Third Point is the leading position holder in the company, with 65.40 million shares valued at $652.7 million. 

Here is what Third Point specifically said about PG&E Corporation (NYSE:PCG) in its Q3 2022 investor letter:

“Since we wrote about PG&E Corporation (NYSE:PCG) in May, the Company has continued to close the valuation gap with its regulated peer group. Over the third quarter PCG’s stock rose 25% versus a 6% decline in the XLU (a proxy for the S&P 500 Utilities Sector). Outperformance was driven by the S&P 500 indexing announcement and continued execution by Patti Poppe, the recently hired CEO, and her team. Management has focused its efforts on mitigating physical and financial risk by building in layers of protection against catastrophic wildfires, financial uncertainty, and rate-payer volatility. Importantly for a utility company, Ms. Poppe has a plan to make much needed investments in safety, reliability, and service quality via capital investment while simultaneously reducing operating expenses.

Despite the recent move, we are optimistic about the Company’s prospects with industry leading 10% EPS growth and likely dividend reinstatement in 2023. PG&E, which currently trades at a 6x discount to peers on ’23 earnings, should continue to re-rate as investors become more familiar with the enhanced regulatory framework under AB1054 and build further confidence in management’s execution capabilities.”