Is There More Room To Grow For These 3 Utilities Stocks?

Tickers in this article: EGAS EXC PEG

Utilities stocks are the best performers of 2014. Will the trend continue or is something else going on?

Utilities stocks are beating every other sector so far in 2014. Tech darlings like Tesla (TSLA) and Netflix (NFLX), who could do no wrong in 2013, have been hammered.

Meanwhile, decidedly unsexy stocks like US Geothermal (HTM) are having their moment in the sun. US Geo is up 92.11% for the quarter. 

Yes, you are reading that correctly. A simple utility has almost doubled in price this year. 

That's highly unusual. That's because utilities are carefully regulated. They aren't allowed to take very much profit from their activity because, well, everybody needs them. Water and power are essential services that the government sometimes meddles with to keep the prices stable. 

[Read more from Kapitall: Value investing: is Warren Buffett really losing his touch?]

This means that they are required to pay out a certain amount of profits to their shareholders, which in turn means that these companies also trade with very high dividends. 

Some people see the rush to buy utilities stocks as a bad thing. The fact that these clunky but often government-backed entities are becoming more valuable suggests that investors are craving more stability and think that tech's boom days are done.

Unless you happen to own utilities stocks already, that's not a good thing. 

In case it's not too late to get in on a brief utilities boom, we ran a screen on utilties stocks. Using only companies based in the US, we narrowed the list looking only at those that have returned at least 25% in 2014. 

To look for cheaper plays we then screened that list for companies with a forward price-to-equity (Forward P/E) ratio below 15. This suggests the company might be undervalued. 

Click on the interactive chart to view data over time. 

 Will these utilities keep moving up? Use the list below to begin your analysis. 

1. Gas Natural Inc. (EGAS): Engages in the distribution and sale of natural gas to residential, commercial, and industrial customers in Montana, Wyoming, North Carolina, and Maine. Market cap at $100.05M, most recent closing price at $9.95.

Performance Quarter: 22.87%