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Utilities may be boring but that doesn’t mean they’re out of favor. Given their historic stability they have become a hotter commodity again. That is why we decided to look for some reasonably priced utility companies based off their P/E Ratio. We used the P/E ratio because it’s a price-multiple valuation metric that can help indicate which firm’s are offering a reasonable “valuation” relative to earnings against peers in the same space.

The Net Profit Margin is a profitability metric that shows how much of each dollar earned is converted into profits. Firm’s that continue to expand their net margins over time generally see their share price increase.

We ran a screen for Utility companies with a P/E Ratio of less than 15. From this narrowed pool we then screened for firm’s had a Net Profit Margin (TTM) of at least 10% or higher.

The P/E Ratio ranks the list from highest to lowest:

1. DPL Incorporated. (DPL)

Sector

Utilities

Industry

Utilities - Regulated Electric

Market Cap

$3,550M

Beta

0.57

The company sells electricity in West Central Ohio. The firm’s P/E Ratio is 14.93. DPL’s Net Margin (TTM) is 12.10%. The short interest was 1.10% as of 08/31/2011.

2. Wisconsin Energy Corporation. (WEC)

Sector

Utilities

Industry

Utilities - Diversified

Market Cap

$7,393M

Beta

0.27

The company provides electricity and natural gas services in Wisconsin and Michigan. The firm’s P/E Ratio is 14.77. WEC’s Net Margin (TTM) is 11.83 %. The short interest was 11.83 % as of 08/31/2011.

3. CPFL Energy SA. (CPL)

Sector

Utilities

Industry

Utilities - Diversified

Market Cap

$11,682M

Beta

0.68

The company generates and sells electricity in Brazil. The firm’s P/E Ratio is 14.37. CPL’s Net Margin (TTM) is 11.73%. The short interest was N/A as of 08/31/2011.

4. El Paso Electric Company. (EE)

Sector

Utilities

Industry

Utilities - Regulated Electric

Market Cap

$1,341M

Beta

0.57

This is a public utility company engaged in the generation, transmission and distribution of electricity. The firm’s P/E Ratio is 14.06%. EE’ s Net Margin (TTM) is 12.20. The short interest was N/A as of 08/31/2011.

5. AGL Resources, Inc. (AGL)

Sector

Utilities

Industry

Utilities - Regulated Gas

Market Cap

$3,213M

Beta

0.47

The company offers natural gas in six states within the US. The firm’s P/E Ratio is 14.03. AGL’s Net Margin (TTM) is 10.07%. The short interest was 5.60% as of 08/31/2011.

6. Idacorp, Inc. (IDA)

Sector

Utilities

Industry

Utilities - Regulated Electric

Market Cap

$1,941M

Beta

0.42

The company produces generates, transmission, distribution, sale and purchase of electric energy. The firm’s P/E Ratio is 13.87. IDA’s Net Margin (TTM) is 13.44%. The short interest was 4.00% as of 08/31/2011.

7. Cleco Corporation. (CNL)

Sector

Utilities

Industry

Utilities - Regulated Electric

Market Cap

$2,163M

Beta

0.41

The company offers energy services through Cleco Power and Midstream. The firm’s P/E Ratio is 12.72. CNL’s Net Margin (TTM) is 15.03%. The short interest was 6.40% as of 08/31/2011.

8. Duke Energy Corporation. (DUK)

Sector

Utilities

Industry

Utilities - Regulated Electric

Market Cap

$26,037M

Beta

0.39

The company offers integrated network of energy assets. The firm’s P/E Ratio is 12.72. DUK’s Net Margin (TTM) is 14.00%. The short interest was N/A as of 08/31/2011.

9. NextEra Energy Inc. (NEE)

Sector

Utilities

Industry

Utilities – Diversified

Market Cap

$23,123M

Beta

0.56

The company provides of electricity-related services. The firm’s P/E Ratio is 12.47. NEE’s Net Margin (TTM) is 12.05%. The short interest was 1.30% as of 08/31/2011.

10. PPL Corp. (PPL)

Sector

Utilities

Industry

Utilities – Diversified

Market Cap

$16,570M

Beta

0.44

The company is an energy and utility with services all over the world. The firm’s P/E Ratio is 11.74. PPL’s Net Margin (TTM) is 12.71%. The short interest was 3.00% as of 08/31/2011.

We hope this list helps investors as they do their own due diligence on utility companies.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Cheap Utility Companies With Strong Profitability