Profitable Natural Gas Stocks with a Sustainable Edge

Profitable Natural Gas Stocks with a Sustainable Edge

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Last week Kapitall spoke with Richard and Kyle Rudden of Target Rock Advisors, who specialize in creating indexes of profitable and sustainable utility companies.

Although utilities are rarely considered “sustainable investments” and “sustainability” is loosely defined to begin with, Target Rock aims to make sense of this otherwise unclear market sector.

Interestingly, the utilities that make their lists of financially sound, environmentally and socially sustainable stocks have outperformed the wider utility industry. By and large, the names also have forward earnings growth of around 6%, a big number for an industry that tends to grow at a glacier pace.

Natural Gas Outlook

The Ruddens’ know the ins and outs of utility trends, so it bodes well that their outlook on natural gas utilities jives with other bullish industry analysts:

“There’s a tremendous amount of gas supply and we’ve perfected the technology to access it, but the big question is if production costs can be supported by present and future prices… At present it’s not sustainable.” That being said, there may soon be a turnaround.

“Wells are shutting down because there’s no economic sense to keep producing. But for the natural gas being produced, there are more proposals to liquefy it and ship overseas. It causes prices to start coming back up – they will get to a good equilibrium level.” 

Business Section: Investing Ideas

The utilities on Target Rock Advisor’s come in various forms, from electricity generation to distribution systems, coal, oil and natural gas. They point out that no names on their list are pure natural gas stocks.

However there are 19 names with exposure to natural gas that made it on the sustainable indexes.We list them below, along with their ranking and scores (out of 100) on Target Rock’s 5 indexes:

- Overall Sustainability
- Economic
- Environmental
- Social
- ESG (Environmental, Social and Governance)

List sorted by rank on Overall Sustainability index.

Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:

 

“1. Edison International (EIX, Earnings, Analysts, Financials): Engages in the supply of electric energy in central, coastal, and southern California. Market cap at $14.26B, most recent closing price at $43.72. Overall Sustainability, rank: 4 score: 79.1. Economic, rank: 13 score: 75.4. Social, rank: 7 score: 79.7. Environmental, Social and Governance, rank: 4 score: 81. Environmental, rank: 7 score: 82.2.

 

“2. Avista Corp. (AVA, Earnings, Analysts, Financials): Engages in the generation, transmission, and distribution of energy and other energy-related businesses in the United States and Canada. Market cap at $1.5B, most recent closing price at $25.42. Overall Sustainability, rank: 5 score: 78.9. Economic, rank: 21 score: 73.3. Social, rank: 11 score: 77.4. Environmental, Social and Governance, rank: 3 score: 81.6. Environmental, rank: 3 score: 85.9.

 

“3. American Electric Power Co., Inc. (AEP, Earnings, Analysts, Financials): Engages in the generation, transmission, and distribution of electric power to retail customers. Market cap at $18.69B, most recent closing price at $38.54. Overall Sustainability, rank: 8 score: 77.2. Economic, rank: 14 score: 75.3. Social, rank: 4 score: 82.7. Environmental, Social and Governance, rank: 8 score: 78.1. Environmental, rank: 24 score: 73.6.

 

“4. Entergy Corporation (ETR, Earnings, Analysts, Financials): Operates as an integrated energy company in the United States. Market cap at $11.54B, most recent closing price at $64.86. Overall Sustainability, rank: 9 score: 77. Economic, rank: 1 score: 82.1. Social, rank: 5 score: 82.4. Environmental, Social and Governance, rank: 19 score: 74.4. Environmental, rank: 36 score: 66.4.

 

“5. Duke Energy Corporation (DUK, Earnings, Analysts, Financials): Operates as an energy company in the Americas. Market cap at $28.85B, most recent closing price at $21.44. Overall Sustainability, rank: 10 score: 76.9. Economic, rank: 8 score: 76.7. Social, rank: 12 score: 77.4. Environmental, Social and Governance, rank: 11 score: 77. Environmental, rank: 14 score: 76.5.

 

“6. IdaCorp, Inc. (IDA, Earnings, Analysts, Financials): Engages in the generation, transmission, distribution, sale, and purchase of electric energy in the United States. Market cap at $1.94B, most recent closing price at $38.55. Overall Sustainability, rank: 13 score: 75. Economic, rank: 20 score: 73.7. Social, rank: 37 score: 65.7. Environmental, Social and Governance, rank: 13 score: 75.6. Environmental, rank: 4 score: 85.5.

 

“7. Exelon Corporation (EXC, Earnings, Analysts, Financials): Operates as a utility services holding company in the United States. Market cap at $25.48B, most recent closing price at $38.12. Overall Sustainability, rank: 18 score: 73.9. Economic, rank: 12 score: 75.8. Social, rank: 28 score: 71.6. Environmental, Social and Governance, rank: 24 score: 73. Environmental, rank: 21 score: 74.3.

 

“8. ALLETE, Inc. (ALE, Earnings, Analysts, Financials): Engages in the generation, transmission, and distribution of electric power in the United States. Market cap at $1.52B, most recent closing price at $39.98. Overall Sustainability, rank: 19 score: 73.8. Economic, rank: 31 score: 70.4. Social, rank: 24 score: 72.6. Environmental, Social and Governance, rank: 14 score: 75.5. Environmental, rank: 11 score: 78.5.

 

“9. Dominion Resources, Inc. (D, Earnings, Analysts, Financials): Engages in producing and transporting energy in the United States. Market cap at $29.71B, most recent closing price at $51.79. Overall Sustainability, rank: 21 score: 73.3. Economic, rank: 15 score: 74.8. Social, rank: 14 score: 76.9. Environmental, Social and Governance, rank: 26 score: 72.5. Environmental, rank: 33 score: 68.1.

 

“10. Consolidated Edison Inc. (ED, Earnings, Analysts, Financials): Provides electric, gas, and steam utility services in the United States. Market cap at $17.39B, most recent closing price at $59.04. Overall Sustainability, rank: 22 score: 73. Economic, rank: 22 score: 73.1. Social, rank: 23 score: 74.3. Environmental, Social and Governance, rank: 25 score: 73. Environmental, rank: 26 score: 71.6.

 

“11. El Paso Electric Co. (EE, Earnings, Analysts, Financials): Engages in the generation, transmission, and distribution of electricity primarily in west Texas and southern New Mexico. Market cap at $1.19B, most recent closing price at $29.82. Overall Sustainability, rank: 26 score: 72.6. Economic, rank: 6 score: 77.1. Social, rank: 36 score: 66.7. Environmental, Social and Governance, rank: 29 score: 70.3. Environmental, rank: 22 score: 74.

 

“12. Great Plains Energy Incorporated (GXP, Earnings, Analysts, Financials): Engages in the generation, transmission, distribution, and sale of electricity in the United States. Market cap at $2.71B, most recent closing price at $19.69. Overall Sustainability, rank: 28 score: 70.9. Economic, rank: 29 score: 70.6. Social, rank: 16 score: 76.2. Environmental, Social and Governance, rank: 27 score: 71.1. Environmental, rank: 37 score: 65.9.

 

“13. Empire District Electric Co. (EDE, Earnings, Analysts, Financials): Together with its subsidiaries, primarily engages in the generation, purchase, transmission, distribution, and sale of electricity in Missouri, Kansas, Oklahoma, and Arkansas. Market cap at $837.36M, most recent closing price at $19.94. Overall Sustainability, rank: 32 score: 68.6. Economic, rank: 27 score: 70.9. Social, rank: 34 score: 67.1. Environmental, Social and Governance, rank: 36 score: 67.5. Environmental, rank: 34 score: 67.9.

 

“14. Ameren Corporation (AEE, Earnings, Analysts, Financials): Operates as a public utility company in Missouri and Illinois, the United States. Market cap at $7.85B, most recent closing price at $31.92. Overall Sustainability, rank: 34 score: 68.1. Economic, rank: 40 score: 67.4. Social, rank: 25 score: 72.6. Environmental, Social and Governance, rank: 35 score: 68.5. Environmental, rank: 40 score: 64.5.

 

“15. Cleco Corporation (CNL, Earnings, Analysts, Financials): Engages in the generation, transmission, distribution, and sale of electricity in Louisiana. Market cap at $2.44B, most recent closing price at $39.71. Overall Sustainability, rank: 40 score: 66.7. Economic, rank: 36 score: 69. Social, rank: 15 score: 76.4. Environmental, Social and Governance, rank: 41 score: 65.6. Environmental, rank: 47 score: 54.8.

 

“16. CH Energy Group Inc. (CHG, Earnings, Analysts, Financials): Through its subsidiaries, Central Hudson Gas & Electric Corporation (Central Hudson) and Central Hudson Enterprises Corporation (CHEC) engages in the electric utility, natural gas utility, and fuel distribution business. Market cap at $975.41M, most recent closing price at $65.49. Overall Sustainability, rank: 43 score: 65.1. Economic, rank: 46 score: 62. Social, rank: 38 score: 64. Environmental, Social and Governance, rank: 38 score: 66.7. Environmental, rank: 31 score: 69.4.

 

“17. DTE Energy Co. (DTE, Earnings, Analysts, Financials): Operates as an electric and natural gas utility company in Michigan. Market cap at $9.49B, most recent closing price at $55.57. Overall Sustainability, rank: 44 score: 64.7. Economic, rank: 35 score: 69.1. Social, rank: 31 score: 68.8. Environmental, Social and Governance, rank: 44 score: 62.5. Environmental, rank: 46 score: 56.1.

 

“18. Black Hills Corporation (BKH, Earnings, Analysts, Financials): Operates as a diversified energy company primarily in the United States. Market cap at $1.42B, most recent closing price at $31.82. Overall Sustainability, rank: 47 score: 63.9. Economic, rank: 34 score: 69.3. Social, rank: 44 score: 61.9. Environmental, Social and Governance, rank: 45 score: 61.1. Environmental, rank: 43 score: 60.4.

 

“19. CMS Energy Corp. (CMS, Earnings, Analysts, Financials): Operates as an energy company primarily in Michigan. Market cap at $5.88B, most recent closing price at $22.43. Overall Sustainability, rank: 48 score: 61.3. Economic, rank: 45 score: 63.1. Social, rank: 40 score: 63.7. Environmental, Social and Governance, rank: 47 score: 60.4. Environmental, rank: 44 score: 57.1.

 

 

(Written by Rebecca Lipman. Data sourced from Target Rock. Closing date Friday May 4th.)

 

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