4 Utility Stocks to Bet on From the Thriving Electric Power Industry

Industry Overview - The Zacks Utility – Electric Power industry focuses on generating and supplying electricity, with a shift towards clean fuel sources and carbon emission reduction supported by government initiatives [1] - Utilities are investing in grid strengthening and infrastructure to enhance resilience against annual hurricane challenges, minimizing outages and enabling faster power restoration [1] Industry Trends - Interest rates have declined, with the Federal Reserve cutting the benchmark rate by 100 basis points to a range of 4.25-4.50%, easing financial pressure on capital-intensive utilities [4] - The electric power sector is projected to generate 2% more electricity in 2025 compared to 2024, with an increase of approximately 100 billion kilowatt-hours (kWh) [5] - The share of U.S. electricity generation from renewable sources is expected to rise from 23% in 2024 to 25% in 2025 and 27% in 2026, driven by solar and wind capacity additions [6] Company Highlights - Consolidated Edison Inc. plans to invest $38 billion from 2025-2029 and $68 billion over the next decade in energy infrastructure projects [16] - DTE Energy aims to spend $24 billion during the 2025-2029 period to strengthen its electric and natural gas operations [22] - CenterPoint Energy plans to invest $48.5 billion over the next 10 years to expand its operations [25] - Evergy targets nearly $17.5 billion in expected base capital investments through 2029, focusing on renewable generation [29] Financial Performance - The Utility Electric Power industry has gained 8.8% over the past 12 months, outperforming its sector's 6.3% rally [10] - The industry is currently trading at an EV/EBITDA of 14.64X, compared to the S&P 500's 16.56X and the Utility sector's 15.45X [13]