11 Best Electrical Infrastructure Stocks to Buy Now
In this article, we discuss the 11 best electrical infrastructure stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Electrical Infrastructure Stocks to Buy Now.
The United States is currently experiencing an infrastructure and utilities boom, with numerous projects underway in various states. This surge in construction activity is expected to catalyze a multi-year growth phase for leading infrastructure stocks. Concerns have long persisted regarding the aging infrastructure of the country. In November 2021, President Joe Biden took action by signing the Infrastructure Investment and Jobs Act (IIJA) to tackle this issue head-on. This legislation has paved the way for numerous infrastructure projects across the nation. To date, over 46,000 projects have received funding approval, encompassing a wide range of infrastructure developments, including advanced rapid transit corridors, harbor enhancements, water system upgrades, bridge renovations, airport expansions, railway tunnel constructions, fiber broadband installations, and port improvements. With a staggering $1.2 trillion allocated for spending, the top electrical infrastructure stocks stand to benefit significantly from this investment.
In terms of electricity generation, changes in policy, market conditions, and technological advancements are leading to significant transformations in fuel sources. These shifts are exerting new demands and challenges on the US electric grid, since the majority of the country's high-voltage transmission infrastructure dates back to the 1960s and 1970s and was not designed to support the current or projected future requirements of the grid. That said, currently the US electric grid supplies over 3,800 terawatt-hours of electricity to approximately 159 million residential, commercial, and industrial consumers.
However, looking toward the future, the utilities sector finds itself at the forefront of the transition from carbon-based fuels to renewable energy sources. In the first half of 2023, the energy sector witnessed a significant shift, marked by the largest proportion of private sector involvement in infrastructure projects, according to the World Bank. Notably, renewable energy sources dominated the landscape, with 99% of new energy projects dedicated to renewable sources. The Inflation Reduction Act of 2022, the aforementioned Infrastructure Investment and Jobs Act, and the CHIPS and Science Act are anticipated to accelerate this transition by incentivizing the adoption of clean-energy alternatives and reducing greenhouse gas emissions, with forecasts indicating a potential doubling of the portion of US power generation from renewable sources by 2030.
In light of this, investors would do well to keep some of the best electrical infrastructure stocks on their radars, seeing as these companies are exposed to infrastructure spending in the US. Some notable names include the likes of NextEra Energy, Inc. (NYSE:NEE), PG&E Corporation (NYSE:PCG), and The Southern Company (NYSE:SO), among others listed below.
A close-up of an electrical power line with a bright blue sky in the background, highlighting the company's selection of electricity and natural gas services.
Our Methodology
Our methodology for selecting the best electrical infrastructure stocks is based on hedge fund sentiment towards each stock. We evaluated hedge fund sentiment using Insider Monkey's database, which tracks 933 elite hedge funds as of the end of the fourth quarter of 2023. The list is organized in ascending order based on the number of hedge fund holders for each firm. It's worth noting that the top 10 consensus stock picks of hedge funds have outperformed the S&P 500 Index by over 140 percentage points over the last decade (see the details here).
11. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 28
Edison International (NYSE:EIX), along with its subsidiaries, is involved in the generation and distribution of electric power. Covering roughly a 50,000 square mile area in southern California, the company supplies electricity to residential, commercial, industrial, public authorities, agricultural, and other sectors. Furthermore, the company provides decarbonization and energy solutions to commercial, institutional, and industrial customers across North America and Europe.
On February 22, Edison International (NYSE:EIX) announced a quarterly dividend of $0.78 per share, which remain unchanged from the previous dividend. Shareholders will receive the dividend payment on April 30.
According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Edison International (NYSE:EIX), same as the prior quarter. Richard S. Pzena’s Pzena Investment Management is the leading stakeholder of the company, with 13.3 million shares worth $950.7 million.
Much like NextEra Energy, Inc. (NYSE:NEE), PG&E Corporation (NYSE:PCG), and The Southern Company (NYSE:SO), Edison International (NYSE:EIX) is one of the best electrical infrastructure stocks to invest in.
10. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 28
Consolidated Edison, Inc. (NYSE:ED), commonly known as Con Edison (stylized as conEdison) or ConEd, provides a wide range of energy-related products and services to its customers through its subsidiaries. These include Consolidated Edison Company of New York, Inc., a regulated utility offering electric and gas service in New York City and Westchester County, New York, along with steam service in the borough of Manhattan. Additionally, Orange and Rockland Utilities, Inc. serves southeastern New York and northern New Jersey, while Con Edison Transmission, Inc. is engaged in activities related to transmission.
On February 15, Consolidated Edison, Inc. (NYSE:ED) announced a fourth-quarter non-GAAP EPS of $1.00, surpassing market expectations by $0.03. Additionally, the company declared a quarterly dividend of $0.83 per share on January 18. This dividend will be distributed to shareholders on March 15, with a record date of February 14.
In the fourth quarter, 28 hedge funds showed bullish sentiment towards Consolidated Edison, Inc. (NYSE:ED), compared to 27 funds in the previous quarter, as per Insider Monkey’s database. Among them, Ken Griffin’s Citadel Investment Group holds the largest stake in the company, with 879,923 shares valued at $80 million.
9. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 30
Duke Energy Corporation (NYSE:DUK) is an energy company based in the United States. Its operations are divided into two main segments: Electric Utilities and Infrastructure (EU&I), and Gas Utilities and Infrastructure (GU&I). Duke Energy Corporation (NYSE:DUK) is actively pursuing a clean energy transition plan aimed at achieving ambitious sustainability goals. This includes efforts to attain net-zero methane emissions from natural gas service and a 50% reduction in carbon emissions from electric generation by 2030.
The company has been making regular dividend payments to shareholders for the past 97 years and has raised its payouts for 12 consecutive years. On January 11, Duke Energy Corporation (NYSE:DUK) announced a quarterly dividend of $1.025 per share, consistent with its previous dividend. The dividend will be paid on March 18 to shareholders of record as of February 16.
In the fourth quarter, 30 hedge funds expressed bullish sentiment towards Duke Energy Corporation (NYSE:DUK), down from 39 funds in the previous quarter, according to Insider Monkey's database. Among these, Two Sigma Advisors, led by John Overdeck and David Siegel, holds a significant position in the company, with 733,100 shares valued at over $71 million.
8. WEC Energy Group, Inc. (NYSE:WEC)
Number of Hedge Fund Holders: 31
WEC Energy Group, Inc. (NYSE:WEC) is a prominent player in the regulated natural gas and electricity sectors, offering renewable and non-regulated renewable energy services across the United States. The company operates through six distinct segments, namely Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure, and Corporate and Other.
WEC Energy Group, Inc. (NYSE:WEC) announced its fourth-quarter earnings results on February 1, reporting a non-GAAP EPS of $1.10. This figure surpassed Wall Street estimates by $0.02 per share, reflecting better-than-expected performance in earnings. However, the company's revenue for the quarter amounted to $2.22 billion, which fell short of market consensus by $510 million.
According to Insider Monkey’s fourth quarter database, 31 hedge funds were long WEC Energy Group, Inc. (NYSE:WEC), compared to 25 funds in the last quarter. Israel Englander’s Millennium Management is the biggest stakeholder of the company, with 1.8 million shares worth $152.7 million.
7. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 32
American Electric Power Company, Inc. (NASDAQ:AEP) operates as a prominent electric public utility holding company in the United States. The company is primarily involved in generating, transmitting, and distributing electricity to a wide range of customers, including both retail and wholesale clients. Similar to its counterparts in the utility sector, American Electric Power Company, Inc. (NASDAQ:AEP) is making substantial investments in renewable energy initiatives. In November 2023, the company unveiled a $43 billion capital allocation plan spanning five years for this purpose.
On January 19, American Electric Power Company, Inc. (NASDAQ:AEP) announced a quarterly dividend of $0.88 per share, consistent with its previous dividend payout. The dividend was scheduled to be paid on March 8 to shareholders of record as of February 9.
According to Insider Monkey’s fourth quarter database, 32 hedge funds held stakes in American Electric Power Company, Inc. (NASDAQ:AEP), compared to 39 funds in the last quarter. Eric W. Mandelblatt’s Soroban Capital Partners is a prominent stakeholder of the company, with approximately 2 million shares worth $159.5 million.
Similar to NextEra Energy, Inc. (NYSE:NEE), PG&E Corporation (NYSE:PCG), and The Southern Company (NYSE:SO), American Electric Power Company, Inc. (NASDAQ:AEP) ranks as one of the best electrical infrastructure stocks to invest in.
6. The Southern Company (NYSE:SO)
Number of Hedge Fund Holders: 36
The Southern Company (NYSE:SO) is a key player in the electricity sector, specializing in the generation, transmission, and distribution of electricity. Additionally, the company is actively involved in the development, construction, acquisition, ownership, and management of power generation assets, including renewable energy projects.
On February 15, The Southern Company (NYSE:SO) reported a fourth-quarter non-GAAP EPS of $0.64, surpassing analysts' expectations by $0.04. However, the company experienced a 14.2% year-over-year decline in revenue, totaling $6.05 billion, which fell short of market estimates by $1.32 billion.
Insider Monkey's fourth-quarter database revealed that 36 hedge funds held bullish positions in The Southern Company (NYSE:SO), compared to 35 funds in the previous quarter. Among them, Paul Marshall and Ian Wace's Millennium Management emerged as the top position holder in the company, with a stake of 2 million shares valued at $162.8 million.
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Disclosure: None. 11 Best Electrical Infrastructure Stocks to Buy Now is originally published on Insider Monkey.
