NRG Energy Inc (NRG): Today's Featured Utilities Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NRG Energy ( NRG) pushed the Utilities sector lower today making it today's featured Utilities laggard. The sector as a whole closed the day up 0.4%. By the end of trading, NRG Energy fell 27 cents (-1.2%) to $22.25 on average volume. Throughout the day, 3.3 million shares of NRG Energy exchanged hands as compared to its average daily volume of 4.3 million shares. The stock ranged in price between $22.06-$22.76 after having opened the day at $22.65 as compared to the previous trading day's close of $22.52. Other companies within the Utilities sector that declined today were: China Hydroelectric Corporation ( CHC), down 10.1%, American DG Energy ( ADGE), down 3.5%, RGC Resources ( RGCO), down 2.9%, and Empresa Distribuidora y Comercializadora No ( EDN), down 2.1%.
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NRG Energy, Inc., together with its subsidiaries, operates as an integrated wholesale power generation and retail electricity company. The company engages in the ownership, development, construction, expansion, modification, refurbishment, and operation of power generation facilities. NRG Energy has a market cap of $5.11 billion and is part of the utilities industry. Shares are up 23.6% year to date as of the close of trading on Wednesday. Currently there are six analysts that rate NRG Energy a buy, no analysts rate it a sell, and one rates it a hold.

TheStreet Ratings rates NRG Energy as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and generally higher debt management risk.

On the positive front, EQT ( EQT), up 4.7%, Consolidated Water Company ( CWCO), up 3.3%, Pure Cycle Corporation ( PCYO), up 2.8%, and SJW Corporation ( SJW), up 2.4%, were all gainers within the utilities sector with FirstEnergy ( FE) being today's featured utilities sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the utilities sector could consider Utilities Select Sector SPDR ( XLU) while those bearish on the utilities sector could consider ProShares UltraShort Utilities ( SDP).

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