8 Most Profitable Utility Stocks To Invest In

3. NRG Energy (NYSE:NRG)  

Number of Hedge Fund Holders: 56  

TTM Net Income: $2.00 Billion  

5-Year Net Income CAGR: 28.15%

NRG Energy (NYSE:NRG) is an integrated power company based in the U.S. that offers a wide range of energy solutions to customers. The company operates a diverse mix of generation facilities, including solar, wind, and natural gas.

NRG Energy’s (NYSE:NRG) Q2 earnings report was a significant positive catalyst for the company, with consolidated revenue growing 4.8% year-over-year to $6.58 billion. The strong performance was driven by growth in the East and West regions, which reported high single-digit growth in sales, and the Texas region, which continued to show robust performance with volume growth and subscriber count increases. The company’s adjusted EBITDA margin also expanded by 120 basis points to a record 14.2%, driven by lower realized retail supply costs and strong sales across Texas. The company’s Vivint Smart Home business, a smart home company is also a major EBITDA contributor and is expected to continue its growth trajectory, driven by increasing demand for smart home solutions and a growing subscriber base.

NRG Energy (NYSE:NRG) has shown significant signs of recovery, driven by strong demand in Texas and improvement in the East and West regions. Looking ahead, NRG Energy (NYSE:NRG) is well-positioned to benefit from electrification trends driven by increasing data center demand and on-shoring activities. The company has made progress on its strategic priorities, including submitting brownfield development projects to the Texas Energy Fund, which involves repurposing previously used industrial sites for new energy development.

NRG Energy (NYSE:NRG) is expected to increase its earnings by 100% this year. Additionally, the Electric Reliability Council of Texas (ERCOT), an independent organization that manages the flow of electric power across Texas, is anticipating substantial load growth in the coming years, projecting over 60 gigawatts of growth through 2030. This growth is expected to be driven by on-shoring, data centers, and other large-load customers which will provide a long-term demand growth opportunity for NRG Energy (NYSE:NRG).