FirstEnergy Corp (FE): 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.

FirstEnergy ( FE) pushed the Utilities sector lower today making it today's featured Utilities laggard. The sector as a whole closed the day down 0.8%. By the end of trading, FirstEnergy fell 52 cents (-1.3%) to $40.56 on heavy volume. Throughout the day, 6.6 million shares of FirstEnergy exchanged hands as compared to its average daily volume of 3.2 million shares. The stock ranged in price between $40.49-$41.30 after having opened the day at $40.96 as compared to the previous trading day's close of $41.08. Other companies within the Utilities sector that declined today were: China Hydroelectric Corporation ( CHC), down 7.5%, Cadiz ( CDZI), down 7%, American DG Energy ( ADGE), down 5.8%, and Atlantic Power Corporation ( AT), down 4.3%.
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FirstEnergy Corp. operates as a diversified energy company. The company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It owns and operates fossil, hydroelectric, and nuclear generating facilities, as well as wind and solar facilities. FirstEnergy has a market cap of $16.97 billion and is part of the utilities industry. The company has a P/E ratio of 16.9, below the S&P 500 P/E ratio of 17.7. Shares are down 2.8% year to date as of the close of trading on Tuesday. Currently there are two analysts that rate FirstEnergy a buy, one analyst rates it a sell, and 11 rate it a hold.

TheStreet Ratings rates FirstEnergy as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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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