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4 Utility Stocks More Profitable Than Industry Average

Tickers in this article: CNL PNW SO WR

Looking to trade the utilities sector? We screened all traded utility stocks to find names more profitable than the industry average.

We judged profitability on the basis of three trailing twelve month (TTM) margins:

TTM Gross Margin- This measures the percent change in trailing 12 month revenue and trailing 12 month cost. It is the percent of revenue left after paying expenses.

TTM Operating Margin- This is more of a focus on production expenses. In its simplest form, it is the revenue left over after paying variable costs associated with the production of a good.

TTM Pretax Margin- This is the company’s earnings before taxes incorporating all expenses.

Firms with higher margins than their industry peers indicate they are operating more efficiently.

The three profitability screens take general measures of productivity and efficiency and break them down into three subcategories.  When a company is outperforming the industry average by 5% in all three categories, this is considered bullish.

Business Section: Investing Ideas

Below are four utility stocks that are more profitable than the industry average. Do you think they can keep it up? Use this list as a starting point for your own analysis. 

Use the Compar-O-Matic to see the one-year returns for the companies below. Press “play” to see how the returns have varied over the last two years.

Analyze These Ideas: Getting Started

 

���1. Cleco Corporation (CNL): Engages in the generation, transmission, distribution, and sale of electricity in Louisiana. Market cap at $3.01B.

TTM gross margin at 41.67% vs. industry average at 29.1%. TTM operating margin at 28.34% vs. industry average at 19.09%. TTM pretax margin at 23.04% vs. industry average at 12.96%.
 

2. Pinnacle West Capital Corporation (PNW): Provides retail and wholesale electric services primarily in the State of Arizona. Market cap at $6.7B.

TTM gross margin at 38.04% vs. industry average at 29.11%. TTM operating margin at 25.8% vs. industry average at 19.09%. TTM pretax margin at 19.88% vs. industry average at 12.96%.
 

3. Southern Company (SO): Operates as a utility company that provides electric service in the southeastern United States. Market cap at $42.B.

TTM gross margin at 37.76% vs. industry average at 29.1%. TTM operating margin at 26.99% vs. industry average at 19.09%. TTM pretax margin at 19.57% vs. industry average at 12.96%.
 

4. Westar Energy, Inc. (WR): Engages in the generation, transmission, and distribution of electricity It services approximately 690,000 customers in Kansas. Market cap at $4.43B.

TTM gross margin at 36.82% vs. industry average at 29.11%. TTM operating margin at 24.86% vs. industry average at 19.09%. TTM pretax margin at 18.07% vs. industry average at 12.96%.
 

-Ryan Horch, Kapitall