In this article, we will take a look at the five best utility stocks to invest in. If you want to learn about more stocks in the list and the reasons they’re in here, then head on to 15 Best Utility Stocks To Invest In.
5. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 32
Duke Energy Corporation (NYSE:DUK) is an American gas and electricity company that includes renewable power generation in its portfolio. The firm has three segments that target the electricity, gas, and renewable markets and it has thousands of megawatts of power capacity alongside millions of customers.
A big feather in Duke Energy Corporation (NYSE:DUK)’s cap is that it is the second largest utility company in America when its market capitalization is taken into account. Duke Energy Corporation (NYSE:DUK) also has a stable dividend profile. This is evidenced by its dividend yield of 3.69% which is above both the utility sector and the S&P 500.
Wells Fargo increased Duke Energy Corporation (NYSE:DUK)’s share price target to $120 from $109 in May 2022, sharing that it believes that the company will benefit from the transition to renewables. 32 of the 912 hedge funds polled by Insider Monkey for this year’s first quarter had invested in Duke Energy Corporation (NYSE:DUK).
Duke Energy Corporation (NYSE:DUK)’s largest investor is Jim Simons’s Renaissance Technologies which owns 1.6 million shares that are worth $185 million.
4. The AES Corporation (NYSE:AES)
Number of Hedge Fund Holders: 37
The AES Corporation (NYSE:AES) is a power generation and utilities company that is headquartered in Arlington, Virginia, United States. The company uses a variety of sources such as biomass, renewables, coal, and gas to generate electricity.
Susquehanna shared optimism about The AES Corporation (NYSE:AES)’s ability to start its solar generation projects this year in May 2022, stating that it had acquired the necessary equipment. 37 out of the 912 hedge funds polled by Insider Monkey for this year’s March quarter had bought the company’s shares.
The AES Corporation (NYSE:AES) is one of the few companies that can raise electricity prices as fuel prices go up, enabling it to easily pass on rising prices to customers. Additionally, the company also has 10 gigawatts of projects in the pipeline, which bode well for its future.
William B. Gray’s Orbis Investment Management is The AES Corporation (NYSE:AES)’s largest investor. It has a $437 million stake that comes through 16 million shares.
3. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 40
Vistra Corp. (NYSE:VST) serves electricity and natural gas customers in 20 American states. It has a power generation portfolio of thousands of megawatts that is generated through a variety of sources such as gas and renewables.
Vistra Corp. (NYSE:VST) is one of the largest electricity companies in Texas, which means that it will see lesser competition in the market while still maintaining its business after the Texas electricity crisis of 2021. Additionally, when compared to its peers, the firm has some of the strongest valuation metrics out there when analyzed in terms of stability and valuation.
Insider Monkey’s Q1 2022 survey of 912 hedge funds outlined that 37 had bought Vistra Corp. (NYSE:VST)’s shares. The company is also on track to build the largest energy storage facility in the world in California.
Howard Marks’s Oaktree Capital Management is Vistra Corp. (NYSE:VST)’s largest investor through a $671 million stake that comes via 28 million shares.
2. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 47
Constellation Energy Corporation (NASDAQ:CEG) is an electricity generation company headquartered in Baltimore, Maryland, United States. It generates electricity through a variety of sources such as nuclear, solar, dams, and natural gas – all of which are environmentally friendly which in turn is an important factor for the company.
While cutting Constellation Energy Corporation (NASDAQ:CEG)’s share price target to $75 from $70 in May 2022, Wells Fargo advised investors to take benefit from recent share price weakness since it believes that the company will continue to grow. As the first quarter of this year came to an end, 47 of the 912 hedge funds profiled by Insider Monkey had invested in the company.
Constellation Energy Corporation (NASDAQ:CEG) is one of the more friendly ESG power generation companies out there, which suits well for future capital generation. It has a large portfolio of nuclear reactors which enabled it to generate close to 21,000 megawatts of electricity last year.
1. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 64
NextEra Energy, Inc. (NYSE:NEE) is an electricity generator and seller based in the United States. The company uses several mediums to generate electricity and it serves more than ten million customers all over America.
A key strong point for NextEra Energy, Inc. (NYSE:NEE), particularly as we keep the current high oil and gas prices in mind, is that it is the world’s largest solar and wind electricity producer. This serves as a hedge for the company’s generation costs and makes it an attractive alternative to customers wishing for lower prices. On this front, NextEra Energy, Inc. (NYSE:NEE) will also benefit from the pause in solar panel tariffs announced by President Biden in June 2022.
Insider Monkey took a look at 912 hedge fund portfolios for the first quarter of this year and discovered that 64 had invested in NextEra Energy, Inc. (NYSE:NEE)’s shares.
NextEra Energy, Inc. (NYSE:NEE)’s largest investor is Ken Fisher’s Fisher Asset Management. It owns 15 million shares that are worth $1.3 billion.
Disclosure: None. You can also take a look at 10 Value Stocks in Seth Klarman’s Latest Portfolio and 10 Biotech Stocks to Buy Today According to Ken Fisher’s Fisher Asset Management.
