During market volatility, investors seek stable investments and park their money in secure industries like utilities. The industry is currently flourishing rapidly with increasing economic activities and rising energy demand worldwide.
Given the industry’s rosy outlook, it could be wise to invest in quality utility stocks Brookfield Infrastructure Corporation (BIPC), Pampa Energía S.A. (PAM), and Genie Energy Ltd. (GNE) amid market turmoil.
The recent U.S. elections have stirred significant market volatility, impacting every sector and consumers across the country.
Amidst the current market volatility, the utilities sector presents appealing investment opportunities for stability. The U.S. utilities market is poised to experience expansion in electricity sales and deal activities as economic activities and population grow along with evolution in the latest technologies.
The utilities market encompasses electricity, gas, and water companies, which are observing sharp demand with rising energy demand. Propelled by robust economic growth, intense heatwaves, and continued electrification across the globe, global electricity consumption is set to be at a higher pace in 2024 and 2025 compared to previous years.
The 4% growth expected for 2024 beats the highest level of 2007. Also, for 2025 as well, 4% growth is anticipated. The increase in both years is influenced by strong electricity demand in multiple regions and countries, like China, India, and the United States.
Investors can turn to stable utilities stocks with continued demand through various business cycles and provide safety to your portfolio amidst the present market turmoil.
Considering the current economic outlook, let’s examine the fundamentals of sound utility sector stock picks like BIPC, PAM, and GNE.
Brookfield Infrastructure Corporation (BIPC)
BIPC owns and operates regulated natural gas transmission systems in Brazil. It is also engaged in regulated gas and electricity distribution operations in the United Kingdom, electricity transmission and distribution, and gas distribution in Australia.
BIPC’s forward EV/Sales of 1.19x is 71.9% lower than the industry average of 4.23x. Similarly, its forward EV/EBITDA of 3.11x is 72.8% lower than the industry average of 11.44x. Also, its forward Price/Sales of 0.33x is 85.2% lower than the 2.22x industry average.
For the third quarter that ended September 30, 2024, BIPC’s revenues increased 17.5% from the prior year’s quarter to $5.27 billion, and its income before income tax was $313 million. The company’s Funds from Operations came in at $599 million or $0.76 per unit, indicating growth of 7% and 4.1% year-over-year, respectively.
Over the past six months, BIPC’s stock has surged 26.7% and 49.2% over the past year to close the last trading session at $43.54.
BIPC’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth, Quality, and Momentum. Within the Utilities - Domestic industry, BIPC has topped the list of 59 stocks.
Click here to access additional BIPC ratings for Value, Sentiment, and Stability.
Pampa Energía S.A. (PAM)
Headquartered in Buenos Aires, Argentina, PAM operates as an integrated power company. It operates in Electricity Generation; Oil and Gas; Petrochemicals; and Holding and Other Business segments. The company generates electricity through thermal plants, hydroelectric plants, and wind farms with a 5,332 megawatt (MW) installed capacity.
In terms of forward Price/Book, PAM is trading at 1.56x, 11.9% lower than the industry average of 1.77x. Also, the stock’s forward non-GAAP P/E multiple of 7.83 is 56.3% lower than the industry average of 17.92. Further, its forward EV/EBITDA of 5.82x is 49.2% lower than the industry average of 11.44x.
For the third quarter that ended September 30, 2024, PAM’s sales revenue increased 234.4% year-over-year to ARS 510.71 billion ($540 million). Its gross profit grew 174.2% from the year-ago value to ARS 166.41 billion ($175 million). Also, the company’s net income for the period stood at ARS 139.40 billion ($146 million) and ARS 102.6 per share, up 174.8% and 175.8% year-over-year, respectively.
Analysts expect PAM’s revenue for the fourth quarter (ending December 2024) to increase 151% year-over-year to $494.84 million. The company’s EPS for the same period is expected to be $0.71.
PAM’s stock gained 56.1% over the past six months and 100.5% over the past year to close the last trading session at $71.69.
PAM’s POWR Ratings reflect its bright prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock is ranked #11 out of 53 stocks within the Utilities - Foreign industry.
Check all the PAM ratings here.
Genie Energy Ltd. (GNE)
GNE engages in the supply of electricity and natural gas to residential and small business customers internationally. The company operates in two segments, GRE and Genie Renewables. It also develops, constructs, and operates solar energy projects for commercial and industrial customers.
On November 6, GNE announced to pay a quarterly dividend of $0.075 per share to Class A and Class B common stockholders on November 20, 2024, with a record date of November 12, 2024.
GNE pays an annual dividend of $0.30, which translates to a yield of 1.87% at the current share price. Its four-year average dividend yield is 2.13%. Moreover, the company’s dividend payouts have increased at a CAGR of 52.3% over the past three years.
In the third quarter that ended on September 30, 2024, GNE reported total revenues of $111.92 million, and its gross profit was $37.91 million for the same period. Net income and EPS attributable to GNE common stockholders came in at $10.20 million and $0.38 for the quarter, respectively.
Furthermore, the company’s adjusted EBITDA was $13.60 million for the period. GNE’s cash and cash equivalents totaled $136.29 million as of September 30, 2024, compared to $107.61 million as of December 31, 2023.
Shares of GNE have surged 4.6% over the past six months to close the last trading session at $16.08.
GNE’s bright prospects are reflected in its POWR Ratings. The stock has an overall grade of B, which equates to a Buy in our proprietary rating system.
GNE has a B grade for Quality, Sentiment, and Value. It has topped among the 57 stocks within the Utilities - Domestic industry.
Other ratings for GNE for Growth, Momentum, and Stability are also provided, click here to check.
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 >
BIPC shares were trading at $43.00 per share on Wednesday afternoon, down $0.54 (-1.24%). Year-to-date, BIPC has gained 27.68%, versus a 27.04% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Utility Stocks Providing Safe Harbor Amid Market Turmoil StockNews.com
