7 Cheap Utility Stocks to Buy According to Hedge Funds

1. PG&E Corporation (NYSE:PCG)

Forward P/E as of September 27: 13.32

Earnings Growth this year: 10.60%

Number of Hedge Fund Holders: 46

PG&E Corporation (NYSE:PCG), operating through its subsidiary Pacific Gas & Electric Company, provides services to more than 16 million residents in Northern and Central California. The company holds a strong foothold in the state, particularly in Silicon Valley, where its advanced fiber network and predominantly renewable-powered grid are essential for supporting regional data centers.

BofA Securities recently initiated coverage of PG&E Corporation (NYSE:PCG), giving the utility company a Buy rating and setting a price target of $24. The firm anticipates a total expected return of around 17.3%, praising PG&E’s management for effectively handling post-emergence challenges. BofA believes the company is on track to operate like a traditional regulated utility in the U.S. by 2026.

PG&E Corporation (NYSE:PCG) has also been awarded $34.5 million in grants from the U.S. Department of Energy’s Grid Deployment Office. These funds, part of the DOE’s Maintaining and Enhancing Hydroelectricity Incentive Program, will support 19 hydroelectric projects aimed at boosting grid resiliency, improving dam safety, and minimizing environmental impacts.

As of the second quarter of 2024, 46 hedge funds held a collective stake in PG&E Corporation (NYSE:PCG) worth $2 billion, with Third Point being one of the largest shareholders, holding $938.47 million in shares as of June 30.

While we acknowledge the potential of PCG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PCG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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