Smart Energy Plays: Smart-Meter Makers

Itron(ITRI Quote) is the clear-cut pure-play leader in smart metering. The Liberty Lake, Wash., company provides meters and power grid forecasting and management software. Along with low debt and improving operating margins and profitability, this company is in a stronger financial position compared to other pure plays.

Itron earlier this year acquired Actaris, a competitor in Europe. The acquisition is complementary because while Itron is dominant in North America, where it has 55% market share, it is much weaker globally. Actaris' strength on a worldwide basis will give Itron a chance to expand the reach of its product lines. According to a recent conference call, the merged company will be "the No. 1 electric meter supplier, No. 2 gas meter supplier and No. 4 water meter supplier in the world."

An added bonus is that Itron also builds water meters and water efficiency systems. Itron is well aligned to benefit from an impending global upgrade cycle as water utilities implement more automated meter systems to help curtail waste.

Comverge(COMV Quote) and EnerNOC(ENOC Quote) are two companies that recently became public and that provide energy reduction solutions for utilities.

Both of these companies manage programs and networks that help add power grid capacity to utilities during times near overload. They work by providing hardware and economic incentives encouraging customers to cut back on power-draining devices such as pool pumps and HVACs during peak times.