NEW YORK ( TheStreet) -- We have selected six utility stocks that have up to 57% upside potential, based on 12-month price target. Analysts polled by Bloomberg affirm 69% buy rating for these stocks.


6. Spectra Energy ( SE) owns and operates natural gas-related assets in Ontario and natural gas processing services in Western Canada.

Spectra reported net income of $37.6 million for the second quarter of 2011, vs. $33.2 million in the same quarter previous year. These increases are attributable to higher Gulfstream earnings after the company acquired an additional 25% stake in Gulfstream during the fourth quarter of 2010.

During the quarter, the company obtained new investment grade credit ratings and completed its first-ever public debt offering, as well as a follow-on equity offering. Cash available for distribution was $35.4 million for the quarter compared to $33.4 million in the second quarter 2010.

"We ended the quarter in a strong financial position, which allowed us to fund the Big Sandy Pipeline acquisition on July 1, and at the same time, maintain ample liquidity to pursue future growth opportunities," Greg Rizzo, the company's CEO, said. Analysts surveyed by Bloomberg expect the stock to gain 28% over the next one year and have 58% buy ratings.

5. NRG Energy ( NRG) operates as a wholesale power generation company in the U.S.

NRG reported net income of $621 million for the second quarter of 2011 compared to $210 million for the same quarter last year. Adjusted EBITDA was $517 million and cash flow from operations came in at $93 million.

The company's 200MW Middletown peaker project, a 50:50 joint venture with The United Illuminating Company, entered into commercial operations in June. The company will be executing solar rooftop generation projects and renewable energy projects in the future. NRG repurchased $130 million worth shares during the first quarter of 2011 and intends to complete the remaining $300 million of share repurchase by the year end.

The company has raised full-year 2011 adjusted EBITDA guidance to range from $1.9 to $2 billion. Analysts surveyed by Bloomberg project 31% upside over the next one year with 50% buy ratings.

4. UGI Corporation ( UGI) distributes and markets energy products like natural gas, propane and butane, besides generating electricity.

Net sales for the quarter ended June 2011 were $471 million, up 18.7% from $396.6 million in the year-ago quarter. Net loss stood at $7.2 million, vs $3.4 million profit in the same quarter prior year.

On the third-quarter results, Lon R. Greenberg, CEO of UGI, said, "Improved results from our Gas Utility and AmeriGas were not enough to offset an $11.3 million decrease in earnings from our International Propane businesses resulting principally from extraordinarily warm spring weather in Europe. Given the negative impact of International Propane's results on our quarterly and year-to-date earnings, as well as our current assessment of business prospects for a seasonal loss in the fourth quarter, we now expect earnings per share of approximately $2.20 for the full fiscal year ending September 30, 2011."

The stock is trading at 11.88 times its 2011 earnings with an estimated 34% upside over the next 12 months, according to a Bloomberg consensus.

3. Covanta Holding Corporation ( CVA) deals in the conversion of waste into energy and other related products in the U.S.

For the second quarter of 2011, operating revenue increased 5% to $411 million from $393 million in the comparable period in 2010. Adjusted EBITDA was $123 million. Adjusted EPS for the second quarter of 2011 was 14 cents, up from 11 cents in the corresponding quarter prior year.

During the second quarter, Covanta entered into a contract to sell its Madurai facility in India, the third of the four Asia independent power provider (IPP) assets designated for sale. Sanjiv Khattri, Covanta's CFO, said, "We are on track to realize gross proceeds of $270 to $290 million, assuming we successfully close all four asset sales. We have tax efficiently repatriated over $135 million of that amount and have been proactively returning this capital to shareholders."

For full-year 2011, Covanta estimates EBITDA in the range of $480 to $520 million. Analysts' consensus estimate pegs the stock's average gains at 37% over the next one year with buy ratings of 58%.

2. Calpine Corporation ( CPN) is a U.S.-based wholesale power company operating natural gas-fired and geothermal power plants in North America.

Adjusted EBITDA for the second quarter of 2011 increased to $406 million from $381 million in the second quarter of 2010, driven in large part by a $69 million improvement in Commodity Margin to $602 million from $533 million in the corresponding quarter of 2010. Net loss was $70 million for the quarter over a net loss of $115 million in the year-ago period.

The company refinanced $360 million of corporate debt. The company closed project financing to fund construction of Russell City Energy Center as well as at Los Esteros, where project financing is in advanced stages.

For full-year 2011, the company projects adjusted EBITDA to range from $1,700 million to $1,750 million. On average, analysts expect the stock to gain 50% over the next one year with buy ratings of 73%.

1. The AES Corporation ( AES) is a power company with global presence and owns a portfolio of electricity generation and distribution businesses in 28 countries.

Consolidated revenue increased 16% to $4.5 billion in the second quarter of 2011 owing to favorable foreign currency impact, contributions from new businesses from Ballylumford in Northern Ireland, Angamos in Chile, Maritza in Bulgaria, and growing demand at its Brazilian utilities.

EPS improved to 32 cents from 24 cents during the second quarter of 2010. On the earnings front, Paul Hanrahan, AES CEO, said, "Compared to the first quarter of this year, adjusted EPS growth reflects improvements in existing operations, as well as income from new construction projects and our recent acquisition in Northern Ireland. In addition, I am pleased with our recent progress on our remaining construction projects and we remain on track to achieve our 2011 guidance". Consolidated gross margin came lower at 22.5% compared to 25.5% in the second quarter of 2010 due to higher fixed costs in Latin America and lower volumes and spot prices at its Europe and Asia Generation businesses.

For full-year 2011, the company has guided EPS to range from $1.08 to $1.14. Analysts polled by Bloomberg project 57% upside over the next one year with 83% buy ratings. The stock has more than doubled in the last one year and is trading at 9.7 times its estimated 2011 earnings.

>>To see these stocks in action, visit the 6 Utility Stocks With Upside portfolio on Stockpickr.

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