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Utility stocks may not be the sexiest of sectors, but like any stock with a reasonable rate of return and strong fundamentals, they can still get the job done. Today we focused on utility companies that have achieved solid profitability, and that have also received positive ratings from analysts. After you see our list of companies, we think you'll want to give these stocks a second look.

The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time this means that it's earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than competitors.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.

We first looked for utility stocks. We then looked for companies that analysts rate as "Buy" (2 < mean recommendation < 3). We then looked for companies with strong profit margins (1-year operating margin>15%)(1-year fiscal EPS growth rate>10%). We did not screen out any market caps.

Do you think these stocks have what it takes to grow? Use our screened list as a starting point for your own analysis.

1) American Water Works Company, Inc. (NYSE:AWK)

Sector:Utilities
Industry:Water Utilities
Market Cap:$6.03B
Beta:0.32

American Water Works Company, Inc. has a Analysts' Rating of 1.90 and Operating Profit Margin of 30.54% and Earnings Per Share Growth Rate of 18.59%. The short interest was 0.42% as of 06/05/2012. American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services to residential, commercial, industrial, public, and other customers in the United States and Canada. The company's Regulated Businesses segment offers water and wastewater services to approximately 1,100 communities in 16 states. This segment owns approximately 80 surface water treatment plants, 500 groundwater treatment plants, 1,000 groundwater wells, 100 wastewater treatment facilities, 1,100 treated water storage facilities, 1,200 pumping stations and 90 dams, and 46,000 miles of mains and collection pipes.

2) ITC Holdings Corp. (NYSE:ITC)

Sector:Utilities
Industry:Electric Utilities
Market Cap:$3.55B
Beta:0.65

ITC Holdings Corp. has a Analysts' Rating of 2.10 and Operating Profit Margin of 52.11% and Earnings Per Share Growth Rate of 16.32%. The short interest was 4.42% as of 06/05/2012. ITC Holdings Corp., together with its subsidiaries, engages in the transmission of electricity in the United States. The company operates as conduits, allowing for power from generators to be transmitted to local distribution systems either entirely through its own systems or in conjunction with neighboring transmission systems. Its operations include asset planning; engineering, design, and construction; maintenance; and real time operations.

3) American States Water Company (NYSE:AWR)

Sector:Utilities
Industry:Water Utilities
Market Cap:$701.03M
Beta:0.35

American States Water Company has a Analysts' Rating of 2.10 and Operating Profit Margin of 23.28% and Earnings Per Share Growth Rate of 34.39%. The short interest was 3.29% as of 06/05/2012. American States Water Company, together with its subsidiaries, provides water, electric, and contracted services in the United States. It engages in the purchase, production, and distribution of water in 75 communities in 10 counties in California; and provides electric service to the City of Big Bear Lake and surrounding areas in San Bernardino County, California. The company also provides water and wastewater services, including the operation, maintenance, renewal, and replacement of the water and wastewater systems to various military installations.

4) Connecticut Water Service Inc. (NASDAQ:CTWS)

Sector:Utilities
Industry:Water Utilities
Market Cap:$254.76M
Beta:0.47

Connecticut Water Service Inc. has a Analysts' Rating of 2.20 and Operating Profit Margin of 33.68% and Earnings Per Share Growth Rate of 14.24%. The short interest was 3.58% as of 06/05/2012. Connecticut Water Service, Inc., through its subsidiaries, operates as a regulated water company in Connecticut. It operates through three segments: Water Activities, Real Estate Transactions, and Services and Rentals. The Water Activities segment supplies public drinking water.

5) Aqua America Inc. (NYSE:WTR)

Sector:Utilities
Industry:Water Utilities
Market Cap:$3.35B
Beta:0.21

Aqua America Inc. has a Analysts' Rating of 2.20 and Operating Profit Margin of 40.07% and Earnings Per Share Growth Rate of 21.25%. The short interest was 3.27% as of 06/05/2012. Aqua America, Inc., through its subsidiaries, operates regulated utilities that provide water or wastewater services in the United States. The company serves residential, commercial, fire protection, industrial, other water, wastewater, and other utility customers in Pennsylvania, Texas, North Carolina, Ohio, Illinois, New Jersey, New York, Florida, Indiana, Virginia, Maine, and Georgia. It also provides water and wastewater services through operating and maintenance contracts with municipal authorities and other parties, as well as offers sludge hauling, septage and grease services, backflow prevention services, and other non-regulated water and wastewater services.

6) National Fuel Gas Co. (NYSE:NFG)

Sector:Utilities
Industry:Gas Utilities
Market Cap:$3.55B
Beta:1.01

National Fuel Gas Co. has a Analysts' Rating of 2.40 and Operating Profit Margin of 25.46% and Earnings Per Share Growth Rate of 16.50%. The short interest was 1.88% as of 06/05/2012. National Fuel Gas Company operates as a diversified energy company in the United States. The company's Utility segment sells natural gas or provides natural gas transportation services to approximately 731,600 customers in Buffalo, Niagara Falls, and Jamestown, New York; and Erie and Sharon, Pennsylvania. Its Pipeline and Storage segment provides interstate natural gas transportation and storage services through an integrated gas pipeline system extending from southwestern Pennsylvania to the New York-Canadian border, and eastward to Ellisburg and Leidy, Pennsylvania; and owns and operates 27 underground natural gas storage fields, as well as operates 4 other underground natural gas storage fields jointly with other interstate gas pipeline companies. This segment also transports natural gas for distribution corporation and other utilities, industrial customers, and power producers in New York state.

7) EQT Corporation (NYSE:EQT)

Sector:Utilities
Industry:Gas Utilities
Market Cap:$6.67B
Beta:0.82

EQT Corporation has a Analysts' Rating of 1.90 and Operating Profit Margin of 37.90% and Earnings Per Share Growth Rate of 103.72%. The short interest was 2.57% as of 06/05/2012. EQT Corporation, together with its subsidiaries, operates as an integrated energy company in the United States. It operates in three segments: EQT Production, EQT Midstream, and Distribution. The EQT Production segment engages in the exploration, development, and production of natural gas, natural gas liquids, and crude oil in the Appalachian Basin.

8) El Paso Electric Co. (NYSE:EE)

Sector:Utilities
Industry:Electric Utilities
Market Cap:$1.26B
Beta:0.57

El Paso Electric Co. has a Analysts' Rating of 2.30 and Operating Profit Margin of 20.69% and Earnings Per Share Growth Rate of 19.33%. The short interest was 2.70% as of 06/05/2012. El Paso Electric Company, a public utility company, engages in the generation, transmission, and distribution of electricity in west Texas and southern New Mexico. Its energy sources consist of nuclear fuel, natural gas, coal, and wind turbines, as well as purchased power. The company owns 6 electrical generating facilities with a net dependable generating capability of approximately 1,785 megawatts. It serves approximately 380,000 residential, commercial, industrial, public authority, and wholesale customers.

*Company profiles were sourced from Finviz.

Source: 8 Utility Stocks With Solid Earnings Warranting Analyst Confidence