Best Utility Stocks UK

2. Brookfield Infrastructure Partners

Unlike other utility stocks, Brookfield Infrastructure Partners is a slightly different proposition.

Rather than generating electricity or providing water, Brookfield Infrastructure owns a portfolio of companies involved in utilities infrastructure.

This means the company is responsible for facilitating the movement and also storage of utility commodities, such as energy and water.

Crucially, this means that the business benefits from predictable, regular cash flow over time. This can be a positive for investors, as it is often an indicator of a stable company with money always coming in.

On 17 November 2022, Brookfield shares traded for $36.91 when markets opened in the US.

Source: The Motley Fool

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3. Dominion Energy

A constituent of the S&P 500 index, Dominion Energy is one of the largest power and energy companies in the US.

The company was founded in 1983 and now supplies electricity and energy to nearly 7 million customers throughout North America, employing more than 17,000 people.

With the need for companies to have an eye on carbon and methane emissions, Dominion is also involved in alternative methods of generating power, including:

• Natural gas
• Solar
• Wind
• Hydro-electric
• Biomass

2022 has been a tough year for the business, with shares falling around 14%. But Bloomberg reported this month that the company has replaced its chief financial officer and is set to undertake a “top-to-bottom” review that could boost its prospects over the coming months.

As of 17 November 2022, Dominion shares were $58.70 at market open.

Source: IG

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4. E.ON

Headquartered in Essen, Germany, and operating throughout Europe, E.ON could add a much-needed spark to your portfolio.

The German company was only founded in 2000 but has gone on to dominate the electricity and gas sector with its competitively priced services. It is one of the few investor-owned electricity providers.

E.ON also has a commitment to net zero, providing:

• 100% renewable energy to all its 5.6 million domestic UK customers
• £3.5 billion in investment to UK renewables since 2009
• 4 million smart meters
• 1,200 business electric vehicles charge points by 2022.

E.ON shares cost €8.91 when markets opened on 17 November 2022.

Source: IG

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5. National Grid

National Grid is the UK’s electricity system operator, making it a practically unmissable option when investing in the UK utilities sector.

In the year to March 2022, National Grid’s operating profit rose significantly by 82%. Figures like this are the reason that it is a constituent of the FTSE 100, an index of the largest 100 companies listed on the London Stock Exchange by market capitalization (market cap).

National Grid also operates in the US, offering power to more than 20 million customers across Rhode Island, New York, and Massachusetts.

National Grid shares traded for £10.13 at market open on 17 November 2022.

Source: Admiral Markets

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6. NextEra Energy

With nearly 15,000 employees throughout the US and Canada, NextEra Energy Resources claims to be the world’s largest utility company, with a market cap of $100 billion.

Figures published by Reuters in October suggest that it has been a good year for the business – Q3 revenue reached $6.72 billion, a remarkable $1 billion ahead of expectations. Meanwhile, profits reached $0.85 per share.

A major reason for this performance is that NextEra is heavily involved in renewable energy, claiming to generate more wind and solar energy than any other business. This saw demand increase while gas and oil prices have been high due to Russia’s continuing war in Ukraine.

This is also part of its pledge to eliminate carbon emissions by 2045, a positive for investors as it suggests a forward-thinking business with an eye on the future.

On 17 November 2022 when markets opened, NextEra shares traded for $83.26.

Source: The Motley Fool

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7. NRG Energy

NRG Energy is an American energy company based in Houston, Texas, with 6,635 employees serving around 5.5 million customers.

In 2000, the company became independent after previously having been the wholesale arm for Northern States Power Company, the latter of which subsequently became Xcel Energy.

Analysts are tipping NRG Energy as one of the best value utility stocks available on the market, with a 12-month trailing price-to-earnings ratio of 3.1.

The American electric power company traded at $42.32 when markets opened on 27 November 2022.

Source: Investopedia

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8. Southern Company

Instead of being involved in utilities stocks themselves, an investment in Southern Company would mean investing in a “utility holding company”.

Across its various subsidiaries, the US energy provider serves 9 million customers throughout North America.

The company was founded in 1945 and is now one of the leading gas and electricity holding companies in the world.

The benefit of an investment in a holding company like this is that it reduces the risk of investing in a single arm of the business, as it likely would require all of Southern Company’s subsidiaries to fail for the entire business to collapse.

Southern Company also has a subsidiary called Souther Nuclear, dealing with research into nuclear power and the operation of nuclear power plants.

This somewhat controversial but ultimately clean energy source could become popular in the coming years, potentially making Southern Company a good option for buying and holding.

On 17 November 2022, shares in Southern Company opened at $65.68.

Source: Investopedia

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9. SSE

Another member of the FTSE 100 index, SSE is one of the UK’s largest electricity suppliers.

With headquarters in Perth, Scotland, the company is one of the so-called “big six” energy companies, generating and supplying electricity and natural gas.

The business also has a subsidiary called SSE Renewables, focused on the production of renewable energy as the current demand for greener alternatives to fossil fuels and natural gas utilities continues to grow. This arm of the company even claims to be building more offshore wind than any other business.

SSE Renewable is also involved in the production of hydro-electric, using tidal power to produce energy for UK homes and businesses.

SSE’s share price was £16.71 when markets opened on 17 November 2022.

Source: Admiral Markets

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10. United Utilities

United Utilities provides water and wastewater services in the north-west of the UK, supplying 3 million homes and 200,000 businesses.

Another of the FTSE 100 constituents, United Utilities is among the biggest companies on the London Stock Exchange.

While many businesses may have struggled in the past couple of years, water companies such as United Utilities have faired relatively well – in fact, full-year results in March showed a 3% increase in revenue and a 1.7% rise in operating profit.

Like many utility suppliers, United Utilities has made a commitment to achieve net zero carbon emissions by 2030.

When markets opened on 17 November 2022, United Utilities traded at £10.12.

Source: IG

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