The SPDR Select Sector Fund Utilities (ARCA: XLU) is down roughly 10% year-to-date and only invests in utility companies that are included in the S&P 500.
With gas futures surging after OPEC+ decided to cut 2 million barrels per day in oil production, many investors are preparing for a winter season with an oil and gas supply crunch.
Companies set to benefit from the rise in natural gas prices are utility companies that are already raising their utility bills ahead of the winter months, passing off elevated costs to their customers. Credit Suisse (SIX:CSGN) Group (NYSE: CS) initiated an Outperform rating on Dominion Energy with a price target of $82 per share. Meanwhile, Alliant Energy (NASDAQ: LNT) received a Neutral rating from Credit Suisse with a price target of $58 per share.
Related Link: OPEC+ To Consider Output Cut 2M Barrels Per Day
- Dominion Energy Inc. (NYSE: D) offers a dividend yield of 4.10% or $2.67 per share annually, through quarterly payments, with an inconsistent track record of increasing its dividend payments. This energy company has over 30 gigawatts of electric generation capacity and more than 90,000 miles of electric transmission and distribution lines. The Richmond, Virginia-based company also owns a liquefied natural gas export facility in Maryland and is constructing a 5.2 GW wind farm off the Virginia Beach coast. The company affirms its full-year 2022 operating earnings guidance range of $3.95 to $4.25 per share. Dominion Energy expects third-quarter operating earnings in the range of $0.98 to $1.13 per share.
- Alliant Energy is offering a dividend yield of 3.40% or $1.71 per share annually, using quarterly payments, with a stellar track record of increasing its dividends for 18 consecutive years. Alliant Energy is the parent of two regulated utilities, Interstate Power and Light and Wisconsin Power and Light, serving nearly 1 million electricity and natural gas customers and approximately 420,000 natural gas-only customers, as of 2021. The Madison, Wisconsin-based company's consolidated guidance for fiscal 2022 is $2.67 to $2.81 earnings per share. Alliant CEO John Larsen says the company is "tracking toward the upper half" of its 2022 earnings guidance.
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