Investors are Turning to Utilities for Profit

Recently, investors have been turning to utilities as candidates for profit growth. The Wall Street Journal wrote about five such utilities: Wisconsin Energy, CMS Energy, Sempra Energy, Cemig, NextEra Energy.
Daily Energy News also reports:

“Professional investors were increasingly pursuing utility stocks due to expectations for growing profits as the industry upgrades the U.S. grid and expands in developing countries, Smart Money reported. Harris Financial managing partner Jamie Cox said power was “more of a growth sector than people think.” Smart Money featured five utilities as drawing particularly high interest, including NextEra Energy and Wisconsin Energy. Wisconsin Energy was said to benefit from favorable regulation, plant improvements, and new renewables projects. CMS Energy was spending $6.4 billion on grid investments after cutting the debt load it took on to pursue overseas growth last decade. Sempra Energy was also making new grid investments, while its natural gas pipelines could also see growth.

Analysts forecast 5 percent to 7 percent profit growth for NextEra Energy as it continues to pursue wind and solar projects in coming years. Finally, Brazil’s Cernig, which was 51-percent government owned, was seen as an example of an overseas utility that could grow from serving an expanding middle class.”

Read the full Wall Street Journal article

To add some context, please also check out this February 2010 article from Smart Money.