We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
As Markets Near Record Highs, 3 Utility Stocks Flashing Buy
Read MoreHide Full Article
With the S&P 500 and Nasdaq still near record highs now may be a good time to scope out utility stocks which can serve as defensive investments in case of an eventual correction.
Utility stocks are deemed defensive as electricity, water, and gas services are essential regardless of the broader economic conditions.
Seeing as their services have consistent and stable demand, it's noteworthy that three utility stocks were added to the Zacks Rank #1 (Strong Buy) list over the last week.
We’ll start with National Fuel Gas Company, an integrated energy company with natural gas assets in the prolific Appalachian basin along with oil-producing assets in California.
As a renowned natural gas distributor, National Fuel Gas is considered a Dividend King having increased its dividend for more than 50 years. NFG has a current annual dividend yield of 3.8% which easily tops the S&P 500’s 1.25% average and is roughly on par with its Zacks Utility-Gas Distribution Industry average.
Image Source: Zacks Investment Research
Furthermore, NFG currently trades at 10.6X forward earnings and at a pleasant discount to the S&P 500’s 23.5X and its industry average of 14X. Better still, annual earnings are expected to dip -2% this year but are forecasted to rebound and spike 15% in fiscal 2025 to $5.83 per share. This is accompanied by steady sales growth and NFG also checks the boxes in terms of key metrics like Return on Equity (ROE) and debt to capital.
As a pure-play water solutions provider in North America and Europe, Primo Water’s stock is attractive with its increased profitability standing out in particular. Primo Water’s annual earnings are now projected to climb 53% in FY24 to $0.95 per share compared to $0.62 a share last year. Plus, FY25 EPS is slated to spike another 16%.
More intriguing is that earnings estimate revisions for FY24 and FY25 are up 8% and 3% over the last 60 days respectively and PRMW offers a very respectable 1.7% annual dividend yield which it has increased 13 times in the last five years.
Rounding out the list is Veolia Environnement which is considered the only global company to offer the entire range of environmental services in the water, waste management, energy, and transportation sectors.
Veolia Environnement’s expansion is very enticing making its stock look cheap trading at $15 and just 7.3X forward earnings. To that point, annual earnings are expected to soar 207% this year to $2.18 per share versus $0.71 a share in 2023. Even better, FY25 EPS is projected to rise another 12%.
Total sales are expected to be up 8% in FY24 and are forecasted to increase another 2% in FY25 to $49.85 billion. The cherry on top is that VEOEY has a 2.79% annual dividend yield that tops the benchmark and the Zacks Utility-Water Supply Industry average of 2.32%.
Image Source: Zacks Investment Research
Bottom Line
Adding to their defensive safety, reliable dividends are another reason investors seek utility stocks and National Fuel Gas Company, Primo Water, and Veolia Environnement are certainly attractive in this regard. More importantly, the favorable and improved growth trajectories of these top-rated utility stocks makes now an ideal time to buy with broader indexes near all-time highs.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
As Markets Near Record Highs, 3 Utility Stocks Flashing Buy
With the S&P 500 and Nasdaq still near record highs now may be a good time to scope out utility stocks which can serve as defensive investments in case of an eventual correction.
Utility stocks are deemed defensive as electricity, water, and gas services are essential regardless of the broader economic conditions.
Seeing as their services have consistent and stable demand, it's noteworthy that three utility stocks were added to the Zacks Rank #1 (Strong Buy) list over the last week.
National Fuel Gas Company (NFG - Free Report)
We’ll start with National Fuel Gas Company, an integrated energy company with natural gas assets in the prolific Appalachian basin along with oil-producing assets in California.
As a renowned natural gas distributor, National Fuel Gas is considered a Dividend King having increased its dividend for more than 50 years. NFG has a current annual dividend yield of 3.8% which easily tops the S&P 500’s 1.25% average and is roughly on par with its Zacks Utility-Gas Distribution Industry average.
Image Source: Zacks Investment Research
Furthermore, NFG currently trades at 10.6X forward earnings and at a pleasant discount to the S&P 500’s 23.5X and its industry average of 14X. Better still, annual earnings are expected to dip -2% this year but are forecasted to rebound and spike 15% in fiscal 2025 to $5.83 per share. This is accompanied by steady sales growth and NFG also checks the boxes in terms of key metrics like Return on Equity (ROE) and debt to capital.
Image Source: Zacks Investment Research
Primo Water (PRMW - Free Report)
As a pure-play water solutions provider in North America and Europe, Primo Water’s stock is attractive with its increased profitability standing out in particular. Primo Water’s annual earnings are now projected to climb 53% in FY24 to $0.95 per share compared to $0.62 a share last year. Plus, FY25 EPS is slated to spike another 16%.
More intriguing is that earnings estimate revisions for FY24 and FY25 are up 8% and 3% over the last 60 days respectively and PRMW offers a very respectable 1.7% annual dividend yield which it has increased 13 times in the last five years.
Image Source: Zacks Investment Research
Veolia Environnement (VEOEY - Free Report)
Rounding out the list is Veolia Environnement which is considered the only global company to offer the entire range of environmental services in the water, waste management, energy, and transportation sectors.
Veolia Environnement’s expansion is very enticing making its stock look cheap trading at $15 and just 7.3X forward earnings. To that point, annual earnings are expected to soar 207% this year to $2.18 per share versus $0.71 a share in 2023. Even better, FY25 EPS is projected to rise another 12%.
Total sales are expected to be up 8% in FY24 and are forecasted to increase another 2% in FY25 to $49.85 billion. The cherry on top is that VEOEY has a 2.79% annual dividend yield that tops the benchmark and the Zacks Utility-Water Supply Industry average of 2.32%.
Image Source: Zacks Investment Research
Bottom Line
Adding to their defensive safety, reliable dividends are another reason investors seek utility stocks and National Fuel Gas Company, Primo Water, and Veolia Environnement are certainly attractive in this regard. More importantly, the favorable and improved growth trajectories of these top-rated utility stocks makes now an ideal time to buy with broader indexes near all-time highs.