Justin Paget
Year-to-date, utilities are the third leading sector if you are going off of the Select Sector SPDR’s. I gave XLU a buy rating in December, and while close to flat in that time, the fund is up over 6% YTD.
FirstEnergy: Hold This Slow Moving Electric Utility Mid-Cap
Summary
- I rate FirstEnergy as a hold due to slow growth and lack of standout catalysts versus peers, despite recent earnings improvement.
- FE's Energize365 initiative aims to modernize its grid and drive 6-8% annual core earnings growth, but its impact remains uncertain.
- Q1 2025 earnings beat expectations, with YoY revenue and EPS growth, yet overall long-term growth remains sluggish.
- FE's valuation is reasonable, and its dividend is attractive, but sector ETFs like XLU may offer better risk/reward for utility investors.
I am an investment author with passion for finance and global markets. I enjoy gearing toward economic analysis, specifically on a macro level. Through current and forward looking market trends, fundamental and technical analysis, my goal is to provide investors and readers with the tools and knowledge to make informed and confident investment decisions. I am always open to feedback and hope you enjoy my writing!
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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