The utility market is experiencing significant growth, driven by the increasing demand for energy efficiency, the adoption of smart grid technologies, and advancements in predictive maintenance.

This expansion presents opportunities for top utility stocks ONEOK, Inc. (OKE - Get Rating), FirstEnergy Corp. (FE - Get Rating), and UGI Corporation (UGI). These companies also offer attractive dividends.

Emerging winter season and trends like the increasing use of smart water meters, advanced metering infrastructure (AMI), and AI integration are boosting the utility industry. Additionally, the rising demand for sustainability and regulatory compliance is driving the adoption of analytics solutions that support green energy and efficient resource management. The global utility and energy analytics are valued at $3.40 billion in 2023 and are projected to grow to $13.40 billion by 2032, at a CAGR of 15.9%.

As utilities continue to adopt data-driven approaches, the sector is set for further growth, improving efficiency, reliability, and sustainability in the energy landscape.

Considering these positive trends, let’s delve deeper into Utilities – Domestic stocks:

Stock #3: ONEOK, Inc. (OKE - Get Rating)

OKE offers natural gas, natural gas liquids (NGLs), refined petroleum products, and related midstream services, including transportation, storage, and marketing. Its products and services cater to exploration and production companies, utilities, industrial firms, distributors, and exporters.

It pays an annual dividend of $ 3.96, which translates to a dividend yield of 4.06% at the prevailing price levels. Its four-year average dividend yield is 5.93%. The company has grown its dividend payment at a CAGR of 2.3% over the past five years.

On December 4, OKE successfully completed MB-6, a 125,000-barrel-per-day natural gas liquids (NGL) fractionator in Mont Belvieu, Texas. The company also announced the full looping of its West Texas NGL Pipeline system, enhancing capacity and efficiency in its operations.

On November 24, OKE and EnLink Midstream, LLC (ENLC) entered into a definitive merger agreement. Under the terms, OKE will acquire all outstanding publicly held common units of ENLC in an all-stock transaction valued at $4.30 billion.

In the fiscal third quarter that ended September 30, 2024, OKE’s total revenues increased 19.9% year-over-year to $5.02 billion. Its operating income grew 52.6% from the year-ago value to $1.13 billion. In addition, the company’s net income available to common shareholders and earnings per common share came in at $ 692 million and $1.18, up 52.8% and 19.2% over the prior-year quarter, respectively.

Street expects OKE’s revenue and EPS for the fourth quarter ending December 31, 2024, to increase 30.5% and 29.8% year-over-year to $6.83 million and $1.53, respectively.

Over the past year, the stock has gained 41.3% to close the last trading session at $97.66. It soared 39.1% year-to-date.

OKE’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

OKE has an A grade for Momentum and a B in Growth. It is ranked #12 out of 57 stocks in the Utilities – Domestic industry.

Beyond what we have stated above, we also have given OKE grades for Value, Stability, Sentiment, and Quality. Get all the OKE’s ratings here.

Stock #2: UGI Corporation (UGI)

UGI delivers propane, LPG, natural gas, liquid fuels, and electricity, serving residential, commercial, industrial, agricultural, and wholesale customers. It also provides energy storage, transportation, and infrastructure services in the U.S. and globally.

It pays an annual dividend of $1.50, which translates to a dividend yield of 5.61% at the prevailing price levels, higher than the four-year average dividend yield of 4.53%. The company has grown its dividend payment at a CAGR of 4.4% over the past five years.

In the fiscal year ended September 30, 2024, UGI’s revenues were $7.21 billion. Its operating income was $770 million, compared to a loss of $1.44 billion in the prior year. While its net income attributable to UGI Corporation stood at $269 million, compared to a loss of $1.50 billion in the prior year. Its adjusted diluted EPS came in at $3.06, up 7.7% over the prior-year.

Street expects UGI’s revenue for the fiscal year (ending September 30, 2025) to increase 28.5% year-over-year to $ 9.27 billion. Its EPS for the same year is $2.91. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.

Shares of UGI have gained 16.1% over the past year and is up 10.2% year-to-date to close the last trading session at $ 27.11.

UGI’s POWR Ratings reflect its robust outlook. UGI has a B grade in Growth and Quality. It is ranked #9 in the same industry.

To access UGI’s Value, Momentum, Stability, and Sentiment ratings, click here.

Stock #1: FirstEnergy Corp. (FE - Get Rating)

FE generates, transmits, and distributes electricity through coal, nuclear, hydroelectric, wind, and solar facilities. Serving around 6 million customers across six U.S. states, it operates extensive transmission and distribution networks.

On December 18, FE declared a quarterly dividend of $0.425 per share on its common stock. The dividend will be payable on March 1, 2025. It pays an annual dividend of $ 1.70, which translates to a dividend yield of 4.34% at the prevailing price levels.

Its four-year average dividend yield is 4.10. The company has grown its dividend payment at a CAGR of 2.1% over the past five years.

On December 5, Jersey Central Power & Light (JCP&L), an FE subsidiary, announced that it had began infrastructure upgrades in three Morris County, NJ communities as part of its New Jersey Reliability Improvement Project. These upgrades are aimed at enhancing electric reliability and are expected to conclude by October 2025.

FE’s total revenues increased 5.7% year-over-year to $ 3.70 billion in the fiscal third quarter that ended on September 30, 2024. In addition, the company’s earnings from continuing operations $ 419 million and non-GAAP operating EPS were $0.85.

Street expects FE’s revenue for the fiscal fourth quarter (ending December 31, 2024) to increase 17.2% year-over-year to $3.69 billion. Its EPS for the same quarter is expected to grow 11.6% from the prior year to $0.69. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.

Shares of FE have gained 6.1% over the past year and is up 6.8% year-to-date to close the last trading session at $39.16.

FE’s POWR Ratings reflect its robust outlook.

It has a B grade in Growth, Momentum, and Stability. It is ranked #4 in the same industry.

Click here to see FE’s ratings for Value, Sentiment, and Quality.

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OKE shares were unchanged in premarket trading Friday. Year-to-date, OKE has gained 46.00%, versus a 24.47% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

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