12 High Growth Utility Stocks to Buy
In this article, we will take a look at the 12 high growth utility stocks to buy. To skip our analysis of the recent market trends and activity, you can go directly to see the 5 High Growth Utility Stocks to Buy.
The U.S. power and utilities industry maintained its focus on increasing its decarbonization efforts, boosted reliability and flexibility of its grid network, and deployed record-breaking volumes of solar power and energy storage across the country, during 2023. The industry was supported by clean energy and climate change related legislation. A study by Deloitte expects these trends to continue going forward in 2024.
The year 2023 also saw supply side issues in the industry caused by shortages of materials, mounting costs of weather and climate disaster recovery, wildfire prevention, and cyber and physical security programs, among others. The largest electric and gas utilities in the United States posted record-high capital expenditures of nearly $171 billion in 2023 to modernize and decarbonize the grid. Some of the leading electric companies in the United States have committed to reduce their carbon emissions by a whopping 80% by 2030, marking a significant upgrade from the previously set “net-zero by 2050” goals.
According to the US Energy Information Administration, utility-scale solar installations in 2023 is expected to reach 24 GW in 2023, which is more than double the installations in the previous year. Another 36 GW of installations are expected in 2024 which would bring the renewable share of electricity to 25% in 2024 from 22% in 2023. Several companies on our list of 12 high growth utility stocks to buy are focused on renewable energy, including NextEra Energy Partners LP (NYSE:NEP), Ormat Technologies, Inc. (NYSE:ORA), and ReNew Energy Global Plc (NASDAQ:RNW), among others.
Recently, the COP28 concluded with delegates from more than a hundred countries agreeing to triple global renewable energy capacity by 2030. You can read more about this in our recently published article: 13 Most Profitable Utility Stocks Now
Utility sector companies generally have a history of stable dividend payouts to their shareholders. S&P 500 Utilities Index, which includes utility companies that are part of the S&P 500 Index, is a good indicator of the overall utility sector. As of October 31, the Utilities index had a dividend yield of 3.69% compared to a 1.7% dividend yield for the broader S&P 500 index. You can read more about this here: 11 Most Undervalued Utility Stocks to Buy According to Hedge Funds
Majority of the stocks on our list have a history of paying a portion of their income to shareholders in the form of dividends. In terms of dividend yields, NextEra Energy Partners LP (NYSE:NEP), Brookfield Infrastructure Partners L.P. (NYSE:BIP), and Northwest Natural Holding Company (NYSE:NWN), rank the highest on our list, respectively, based on the share prices on December 15.
Wind turbines against a backdrop of the sky, signifying the power of renewable energy.
Methodology
To compile our list of the high growth utility stocks to buy, we first made a list of utility stocks with a year-over-year revenue growth of more than 15% for the latest quarter. We only retained companies with market capitalization of more than $500 million and also removed companies facing significant uncertainty. Out of these, the stocks with the highest revenue growth rates were selected. The stocks on our list have been ranked in an ascending order of revenue growth rate. In addition, we have provided the number of hedge funds that had bought their shares as of September 2023 which was determined through Insider Monkey’s database of 910 prominent hedge funds.
12. Ormat Technologies, Inc. (NYSE:ORA)
Latest YoY Quarterly Revenue Growth: 18.29%
Number of Hedge Fund Holders: 16
Based in Reno, Nevada, Ormat Technologies, Inc. (NYSE:ORA) is a leading geothermal company that designs, manufactures, operates, owns, and sells geothermal and recovered energy generation (REG) power plants. Its current generating portfolio of 1,285 MW includes a 1,115 MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 170 MW energy storage portfolio that is located in the U.S.
On November 8, Ormat Technologies, Inc. (NYSE:ORA) released its financial results for Q3 2023. Its revenue increased by 18% y-o-y to $208 million while net income nearly doubled to $35 million. Its EPS of $0.59 surpassed consensus estimates by $0.24.
As of Q3 2023, Ormat Technologies, Inc. (NYSE:ORA) shares were held by 16 out of 910 hedge funds tracked by Insider Monkey with a total value of $211 million. Its largest shareholder was Ian Simm’s Impax Asset Management with ownership of 2.3 million shares valued at $160 million.
11. The York Water Company (NASDAQ:YORW)
Latest YoY Quarterly Revenue Growth: 18.70%
Number of Hedge Fund Holders: 11
The York Water Company (NASDAQ:YORW) provides water and wastewater services to 55 communities in York, Adams, Franklin, and Lancaster counties, Pennsylvania.
On November 3, The York Water Company (NASDAQ:YORW) released its financial results for Q3 2023. Its revenues increased by 19% y-o-y to $19 million, while its net income surged by 33% y-o-y to $8 million. The EPS was recorded at $0.53 for the quarter, which exceeded consensus estimates by $0.07.
On November 20, the Board of Directors of The York Water Company (NASDAQ:YORW) declared a quarterly cash dividend of $0.2108 per share, 4% more than the previous dividend. The company has consistently paid dividends for 207 consecutive years and has increased its dividends for 27 consecutive years.
Like other stocks such as Brookfield Infrastructure Partners L.P. (NYSE:BIP), Fluence Energy, Inc. (NASDAQ:FLNC), and Exelon Corporation (NYSE:EXC), The York Water Company (NASDAQ:YORW) is among the 12 high growth utility stocks to buy.
10. NextEra Energy Partners LP (NYSE:NEP)
Latest YoY Quarterly Revenue Growth: 19.87%
Number of Hedge Fund Holders: 19
Juno Beach, Florida-based NextEra Energy Partners LP (NYSE:NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NYSE:NEE). It owns interests in wind and solar projects in the U.S. as well as natural gas infrastructure assets in Texas and Pennsylvania.
On November 6, NextEra Energy Partners LP (NYSE:NEP) announced a definitive agreement with Kinder Morgan, Inc. (NYSE:KMI) to sell its Texas natural gas pipeline portfolio for $1.8 billion. The company intends to use the proceeds from the transaction to pay off the outstanding Texas Pipeline project-related debt and associated interest rate swaps, complete the buyout remaining under the NEP Renewables II CEPF, and use the remaining proceeds to pay down some of its outstanding corporate revolver.
NextEra Energy Partners LP (NYSE:NEP) also provided guidance for its dividend growth, with 5% to 8% growth per year anticipated in the upcoming years, from an annualized base rate of $3.42. The company expects 6% growth per year through at least 2026. Its units currently have a dividend of 11.33%, one of the highest on our list of 12 high growth utility stocks to buy.
9. Northwest Natural Holding Company (NYSE:NWN)
Latest YoY Quarterly Revenue Growth: 21.09%
Number of Hedge Fund Holders: 9
Portland, Oregon-based Northwest Natural Holding Company (NYSE:NWN) owns NW Natural Gas Company, NW Natural Water Company, NW Natural Renewables Holdings, and other business interests. It provides natural gas service to approximately 2.5 million people in Oregon and Southwest Washington, water distribution and wastewater services to communities throughout the Pacific Northwest, Texas, and Arizona, and renewable fuels, among others.
On November 3, Northwest Natural Holding Company (NYSE:NWN) released its financial results for Q3 2023. Its operating revenues increased by 21% y-o-y to $141 million, while it reported a net loss of $24 million. It generated a normalized EPS of -$0.65 for the quarter, $0.02 more than the consensus estimates.
Northwest Natural Holding Company (NYSE:NWN) has regularly paid dividends and has annually increased the dividend payouts every year for a long time. The company recently declared its latest quarterly dividend at an indicated annual rate of $1.95 per share which marks the 68th consecutive year of dividend increase. Based on the share price on December 15, its shares have a dividend yield of 5.06%.
As of Q3 2023, 9 of the 910 hedge funds tracked by Insider Monkey held Northwest Natural Holding Company (NYSE:NWN) shares valued at a combined total of $10.5 million. Jim Simons’ Renaissance Technologies held the highest number of shares among hedge funds with ownership of 0.07 million shares valued at $2.8 million.
8. Exelon Corporation (NYSE:EXC)
Latest YoY Quarterly Revenue Growth: 23.43%
Number of Hedge Fund Holders: 36
Chicago, Illinois-based Exelon Corporation (NYSE:EXC) is the nation’s largest utility company, serving more than 10 million customers through six fully regulated transmission and distribution utilities: Atlantic City Electric, Baltimore Gas and Electric, Commonwealth Edison, Delmarva Power & Light, PECO Energy Company, and Potomac Electric Power Company.
On November 2, Exelon Corporation (NYSE:EXC) released its financial results for the three months ended September 30, 2023. Its operating revenues increased by 23% y-o-y to $6.0 billion while its net income went up by 4% y-o-y to $700 million. It generated a normalized EPS of $0.67 for the quarter which missed the consensus estimate by $0.01.
Exelon Corporation (NYSE:EXC) has regularly paid dividends for several decades. The company recently declared a regular quarterly cash dividend of $0.36 per share which represents a dividend yield of 4.12% based on the share price on December 15.
Exelon Corporation (NYSE:EXC) ranks #1 on our list of 12 high growth utility stocks to buy in terms of hedge fund share ownership. As of Q3 2023, 36 of the 910 prominent hedge funds tracked by Insider Monkey held its shares valued at $423 million. Michael Gelband’s ExodusPoint Capital was the leading hedge fund shareholder with ownership of 3.45 million shares valued at $130 million.
7. Brookfield Infrastructure Partners L.P. (NYSE:BIP)
Latest YoY Quarterly Revenue Growth: 23.71%
Number of Hedge Fund Holders: 17
Toronto, Canada-based Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream, and data sectors across North and South America, Asia Pacific, and Europe.
On November 1, Brookfield Infrastructure Partners L.P. (NYSE:BIP) released the financial results for Q3 2023. Its revenues increased by 24% y-o-y to $4.5 billion, while its net income declined by 8% y-o-y to $104 million.
The Board of Directors of Brookfield Infrastructure Partners L.P. (NYSE:BIP) declared a quarterly cash dividend of $0.3825 per share which represents a 6% increase compared to the previous year. The annualized dividend for the company represents a dividend yield of 5.08% based on the share price on December 15.
As of Q3 2023, Brookfield Infrastructure Partners L.P. (NYSE:BIP) shares were owned by 17 of the 910 hedge funds tracked by Insider Monkey, with the total shares held by them valued at $116 million. Robert Joseph Caruso’s Select Equity Group was the largest hedge fund shareholder of the company with ownership of 0.48 million shares valued at $14 million.
6. Korea Electric Power Corporation (NYSE:KEP)
Latest YoY Quarterly Revenue Growth: 23.75%
Number of Hedge Fund Holders: 3
Korea Electric Power Corporation (NYSE:KEP), commonly known as KEPCO, is the largest electric utility in South Korea and responsible for the generation, transmission and distribution of electricity and the development of electric power projects. The company is responsible for 93% of Korea's electricity generation and has an installed capacity of 65,383 MW.
On December 8, Korea Electric Power Corporation (NYSE:KEP) released its financial statements for the three months ended September 30, 2023. Its total revenue increased by 24% y-o-y to KRW 24.5 trillion, while it reported a net income of KRW 833 billion.
As of Q3 2023, 3 leading hedge funds tracked by Insider Monkey owned shares of Korea Electric Power Corporation (NYSE:KEP), valued at $11.6 million. Its largest shareholder was David Iben’s Kopernik Global Investors with ownership of 1.6 million shares valued at $10.2 million.
Like other stocks such as Brookfield Infrastructure Partners L.P. (NYSE:BIP), Fluence Energy, Inc. (NASDAQ:FLNC), and Exelon Corporation (NYSE:EXC), Korea Electric Power Corporation (NYSE:KEP) is among the 12 high growth utility stocks to buy.
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Disclosure: None. 12 High Growth Utility Stocks to Buy is originally published on Insider Monkey.
