7 Cheap Utility Stocks to Buy According to Hedge Funds

2. The AES Corporation (NYSE:AES)

Forward P/E as of September 27: 9.44

Earnings Growth this year: 9.10%

Number of Hedge Fund Holders: 46

The AES Corporation (NYSE:AES), headquartered in Texas, operates in 14 countries and has grown from a consulting firm into a significant player in electricity generation and distribution. The company owns and operates power plants and utilities that generate electricity from a diverse mix of sources, including coal, gas, hydro, wind, solar, and other renewables.

During its second-quarter earnings call, The AES Corporation (NYSE:AES) reported adjusted EBITDA with tax attributes of $843 million and adjusted EPS of $0.38. The company is on track to achieve its 2024 financial targets, with a strong emphasis on renewable energy and technological innovation.

As part of its strategic plan to meet future energy needs, AES recently sold a 30% indirect equity stake in its Ohio subsidiary to the Canadian pension fund CDPQ for $546 million. This sale contributes to the company’s broader objective of raising over $2.7 billion from its $3.5 billion asset sale target for 2023 to 2027.

Analysts are optimistic about The AES Corporation’s prospects, with JPMorgan maintaining an Overweight rating and a $29 price target. Jefferies also initiated coverage of AES with a Buy rating, citing the company’s transition towards U.S. renewables and regulated utilities.

At the end of Q2 2024, 46 out of the 912 hedge funds tracked by Insider Monkey held positions in The AES Corporation (NYSE:AES).