Utilities companies are not often the most glamorous picks for investors, but their steadiness in times of economic turmoil makes them attractive when other stocks become too risky. Still, even this often-stable sector has seen firms rocked by the recent upheaval due to tariff uncertainty, speculation about the Federal Reserve, and more.
Here, we highlight two utility companies that may intrigue investors looking for a safer bet during troubled times. One is amid an impressive rally while the other has seen shares dip along with the broader market, but each offers numerous compelling reasons for investors to take a closer look.
With strong earnings history and tailwinds from external factors like government oversight or renewable energy opportunities, these companies could stand out, particularly if the broader market remains prohibitively volatile.
Eletrobrás Surges 30% YTD, Showcasing Value and Stability Amid Market Volatility
[content-module:CompanyOverview|NYSE:EBR]Centrais Elétricas Brasileiras S.A. (NYSE: EBR), the Brazilian electric power titan more commonly known as Eletrobrás, has exhibited strong defensive play bona fides in the last several months amid widespread volatility across the rest of the market. EBR shares are up about 30% year-to-date (YTD) while the S&P 500 is down close to 9% in the same span of time.
Despite that significant rally, EBR shares still offer investors a strong value prospect: the firm has a price-to-sales ratio of 0.42 and a price-to-book ratio of 0.75.
Eletrobrás has seen multiple consecutive quarters of year-over-year (YOY) net operating revenue growth as the company worked to deleverage. In the latest quarter, net operating revenue surged by more than 21% YOY. However, net income partly fell over the same period due to higher costs.
Outside of its operations, two other factors point to short-term success for one of South America's largest utilities companies: first, in March, Eletrobrás signed an agreement with the Brazilian government that ended extended voting rights and nuclear energy project disputes.
Analysts view the agreement as positive for the company, in which the government retains a significant stake, as it will free Eletrobrás from the costly Angra 3 nuclear power project, among other things.
Second, the company's executive slate was reaffirmed for appointments through 2027 as part of the first board election process since Eletrobrás' privatization in 2022.
The vote of confidence in the company's leadership may reassure investors that the firm's general administration is successful and that sudden changes in strategy are unlikely in the near term.
Vistra Returns to Profit, Expands Renewables, and Rewards Shareholders with $5B Buybacks
[content-module:CompanyOverview|NYSE:VST]Vistra Corp. (NYSE: VST) is an integrated retail electricity and power generation company operating across the United States. With a diversified legacy business of natural gas, nuclear, and coal power operations, Vistra has recently expanded its renewable energy platforms as well.
In particular, the company has emphasized both nuclear and solar facilities in recent expansions that could play well as AI data center demand remains high.
The benefits for Vistra have been significant: in the fourth quarter of 2024, the company swung back to income with net earnings of $490 million after a loss in the prior-year quarter.
Adjusted EBITDA for its three largest Retail, Texas, and East business segments increased YOY substantially. The company brought online 116 MW of renewable energy through its Illinois Coal to Solar & Energy Storage Initiative and closed on the remaining 15% stake of Vistra Vision, improving its nuclear ownership by close to 1,000 MW.
With all of these projects in play, investors will be pleased to know that Vistra has also worked to provide tangible benefits to shareholders. Between November 2021 and February 2025, the company repurchased some $5 billion in stock, reducing outstanding shares by about 30%.
And Vistra remains a decently compelling dividend play for investors, with a dividend yield of 0.73% and a sustainable payout ratio of 12.6%, helping to ensure a steady stream of disbursements well into the future.
Analysts see growth potential for VST shares, with 10 out of 13 rating the company a Buy and a consensus price target about 39% above current levels.
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