7 Most Undervalued Utility Stocks To Buy According To Analysts

1. The AES Corporation (NYSE:AES) 

Upside Potential: 17.73%

Forward P/E Ratio as of October 7: 9.89 

Number of Hedge Fund Investors: 46  

The AES Corporation (NYSE:AES) is a utility company that provides affordable and sustainable energy solutions. The company has operations in 15 countries around the world and focuses on renewable energy generation, including solar and wind, while also delivering reliable electricity through conventional energy sources. The company is committed to achieving net zero carbon emissions by 2050 and has made significant strides in expanding its clean energy portfolio.

The AES Corporation’s (NYSE:AES) business model is well-positioned to benefit from the growing global demand for clean energy. The company is rapidly expanding its renewable portfolio, with a goal of reaching 30GW of capacity by 2027, which will support its contracts with major corporate clients such as Microsoft and Google. The AES Corporation’s (NYSE:AES) diverse revenue streams, including electricity generation, utility services, and energy infrastructure, will help the company weather cyclical market conditions. The company’s aggressive shift towards renewables is expected to drive long-term growth, and its growing project backlog is a testament to its ability to execute its growth strategy.

Despite being a major utility company, The AES Corporation (NYSE:AES) is trading at 9.89 times this year’s earnings estimate, a 44.97% discount to its sector median of 17.97. The company’s dividend yield of 3.55% is also attractive, and its investment-grade credit rating is stable. Analysts forecast the company’s earnings will increase by 8.69% this year and are bullish on the company’s stock price, with a consensus Buy rating at a target price of $22.59, which implies a 17.73% increase from its current level.

While we acknowledge the potential of The AES Corporation (NYSE:AES) to grow, our conviction lies in the belief that 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 AES but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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