The future is electrifying, quite literally! As artificial intelligence takes off and data centers become more essential than ever, the demand for electricity is skyrocketing. Homes and businesses are also using more power for heating and transportation. This surge is driving a major spike in energy consumption.
Amid this backdrop, investors could scoop up shares of fundamentally stable electric utility stocks, SSE plc (SSEZY), TransAlta Corporation (TAC), and Genie Energy Ltd. (GNE). With their stable operations and strong market positions, they offer promising growth potential as the energy landscape evolves.
According to the U.S. Energy Information Administration (EIA), power demand in the United States is forecasted to reach record highs in the coming years. For 2024, EIA projects power demand will soar to 4,086 billion kWh, and by 2025, it will climb even further to 4,165 billion kWh.
Residential consumers are leading the charge, with power sales expected to rise to 1,494 billion kWh in 2024. The growing reliance on electricity for everyday needs, from heating to running digital devices, is pushing households to consume more energy.
Commercial customers are not far behind, with power sales forecasted to reach 1,420 billion kWh in 2024. Businesses are increasingly dependent on electricity for everything from lighting to heating, and with the rise of technology and digital services, their energy usage is expected to continue climbing steadily.
Industrial customers are set to use 1,026 billion kWh in 2024. As industries adopt automation, advanced technologies, and sustainable solutions, their electricity needs grow. This shift reflects a broader trend of energy-intensive innovations, driving a surge in industrial electricity consumption.
Looking ahead, rising power demand is set to propel the global electricity distribution utility market to $686.70 billion by 2032, growing at a 6.7% CAGR, according to a report by Global Market Insights.
So now, let us dive deep into the fundamentals of three electric utility stocks, starting with #3.
Stock #3: SSE plc (SSEZY)
Headquartered in Perth, the United Kingdom, SSEZY generates, transmits, distributes, and supplies electricity using water, gas, coal, oil, and multi-fuel resources. The company powers 3.9 million homes and businesses across southern central England and northern Scotland.
On December 6, SSEZY revealed its Coire Glas project, potentially Britain’s largest natural battery, capable of powering three million homes for 24 hours. As the first major pumped storage hydro scheme in 40 years, it would bolster the company’s growth, revenue streams, and market competitiveness.
On August 23, a multifuel energy-from-waste facility in Slough, co-developed by SSEZY and Copenhagen Infrastructure Partners (CIP), announced its commencing of operations. By processing 480,000 tonnes of residual waste annually, the facility generates energy for the United Kingdom, contributing to SSEZY's growth.
For the six months that ended September 30, 2024, SSEZY’s adjusted operating profit increased 24.1% year-over-year to £860.20 million ($1.10 billion). Its adjusted EBITDA rose 19.2% from the year-ago value to £1.32 billion ($1.69 billion).
Additionally, the company’s profit after tax attributable to ordinary shareholders and adjusted EPS grew 35% and 34.6% from the prior year’s value to £544.80 million ($694.81 million) and £49.80, respectively.
Analysts expect SSEZY’s revenue for the fiscal year ending March 2025 to come in at $13.22 billion. Its EPS for the same period is expected to rise 3.9% year-over-year to $2.10.
Shares of SSEZY have declined 1% intraday, closing the last trading session at $21.17.
SSEZY’s POWR Ratings mirror its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.
SSEZY has a B grade for Momentum, Stability, and Value. Within the Utilities - Foreign industry, it is ranked #7 out of 53 stocks.
In addition to the POWR Ratings highlighted above, you can check SSEZY’s ratings for Growth, Sentiment, and Quality here.
Stock #2: TransAlta Corporation (TAC)
Headquartered in Calgary, Canada, TAC develops, produces and sells electrical energy. The company has five segments: Hydro; Wind and Solar; Gas; Energy Transition; and Energy Marketing. It serves industries like real estate, manufacturing, hospitality, finance, and oil and gas.
On December 4, TAC completed its acquisition of Heartland Generation Ltd. and Alberta Power Ltd. from Energy Capital Partners for an approximate purchase price of $542 million. This acquisition strengthens TAC’s portfolio through the company’s flexible, fast-ramping capacity and marketing capabilities, as well as by creating meaningful cash flows.
For the fiscal third quarter that ended September 30, 2024, TAC’s revenues came in at CAD $638 million ($450.36 million). Its adjusted EBITDA was reported to be CAD $325 million ($229.41 million). Moreover, the company’s funds from operations (FFO) and FFO per share came in at CAD $200 million ($141.18 million) and CAD $0.68, respectively.
Street expects TAC’s revenue and FFO for the fiscal year ending December 2024 to come in at $2 billion and $1.97, respectively. In addition, the company surpassed the consensus revenue estimates in three of four trailing quarters.
Shares of TAC have surged 46.1% over the past three months and 71.1% over the past year, closing the last trading session at $13.19.
TAC’s sound prospects are projected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
TAC has a B grade for Momentum and Quality. Within the Utilities - Foreign industry, it is ranked #16 out of 53 stocks.
Click here to access TAC’s ratings for Value, Growth, Sentiment, and Stability.
Stock #1: Genie Energy Ltd. (GNE)
GNE supplies electricity and natural gas to residential and small business customers. The company has two segments: GRE and Genie Renewables. It also develops, constructs, and operates solar energy projects, provides energy brokerage and advisory services and manufactures and distributes solar panels.
On December 5, GNE provided an update on its consumer insurance initiative. The company has secured insurance broker licenses in seven key states and has begun to offer third-party insurance solutions to its customer base. This initiative is in line with the company’s risk management strategy, which ensures stable growth.
On November 19, GNE secured $7.4 million in fixed-rate financing from National Cooperative Bank for its 10MW solar array portfolio. Acquired via its Sunlight Energy subsidiary, these arrays supply fixed-price solar power to educational facilities in three Midwestern states, strengthening GNE’s renewable energy footprint and financial stability.
For the fiscal 2024 third quarter that ended September 30, GNE’s total revenues came in at $111.92 million. Its gross profit and income from operations amounted to $37.91 million and $11.68 million, respectively. Moreover, the company’s adjusted EBITDA came in at $15.50 million.
Additionally, non-GAAP net income attributable to GNE common stockholders and non-GAAP EPS were reported to be $10.90 million and $0.41, respectively.
Shares of GNE have surged 1.7% over the past six months to close the last trading session at $14.91.
GNE’s robust prospects are apparent in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
GNE has a B grade for Value, Sentiment, Momentum, and Quality. It has topped the 57-stock Utilities - Domestic industry.
Click here to access its Growth and Stability ratings.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
SSEZY shares were unchanged in premarket trading Thursday. Year-to-date, SSEZY has declined -9.13%, versus a 29.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
3 High-Voltage Electric Utility Stocks to Plug Into Now StockNews.com
