5 Best Utility Stocks To Buy Now

3. Constellation Energy Corporation (NASDAQ:CEG)

Market cap as of March 28: $24.80 Billion
Number of Hedge Fund Holders: 51

Constellation Energy Corporation (NASDAQ:CEG) is a company that offers natural gas, electricity, and power management services to residential and commercial customers. It was formed after being spun off from Exelon in 2022. The company is recognized as the top zero-carbon energy producer in the United States, providing carbon-free electricity to 10% of the country’s supply.

Moreover, Constellation Energy Corporation (NASDAQ:CEG) serves over 20 million households and 75% of the Fortune 100. The company has set ambitious goals of generating 95% carbon-free electricity by 2030 and 100% by 2040. It has a generating capacity of 32,355 MW through nuclear, wind, solar, natural gas, and hydroelectric assets. Constellation Energy Corp. serves a broad range of clients, including utilities, municipalities, cooperatives, and residential and commercial customers.

Constellation Energy Corporation (NASDAQ:CEG) has a low dividend yield of 1.52% compared to other utility stocks, but its shares have delivered a 32.56% return over the last 12 months. In addition, the company recently declared a quarterly dividend of $0.282 per share, which is a 100% increase from the previous dividend.

Credit Suisse downgraded Constellation Energy Corporation (NASDAQ:CEG) to ‘Neutral’ from ‘Outperform’ with a price objective of $83, down from $91.

51 hedge funds owned positions in the business at the end of the December quarter, according to Insider Monkey’s database, down from 54 in the preceding quarter. Constellation Energy Corporation (NASDAQ:CEG)’s largest shareholder was Orbis Investment Management at the end of Q4 2022, with 4.15 million shares.

In its Q3 2022 investor letter, Alger Capital stated the following regarding Constellation Energy Corporation (NASDAQ:CEG):

“Constellation Energy Corporation (NASDAQ:CEG) is America’s leading clean energy company, based on carbon-free production. The company is the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations, and a range of wholesale customers (such as municipalities, cooperatives, and other end markets) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets. Constellation produces nearly 10% of the nation’s carbon-free energy.

Shares outperformed during the third quarter primarily due to the Inflation Reduction Act (IRA). Signed into law in august, the bill provides a nuclear production tax credit of approximately $43.75 per megawatt hour of energy generated. This credit favorably impacted earnings, resulting in an increase in Constellation’s share price.”