3 Stocks Moving The Utilities Sector Upward

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 18 points (0.1%) at 16,572 as of Monday, Aug. 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,374 issues advancing vs. 630 declining with 131 unchanged.

The Utilities sector as a whole closed the day up 0.2% versus the S&P 500, which was up 0.3%. Top gainers within the Utilities sector included Centrais Eletricas Brasileiras ( EBR.B), up 1.7%, Pure Cycle ( PCYO), up 1.5%, Delta Natural Gas ( DGAS), up 1.6%, Connecticut Water Service ( CTWS), up 1.8% and Niska Gas Storage Partners ( NKA), up 3.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

Delta Natural Gas ( DGAS) is one of the companies that pushed the Utilities sector higher today. Delta Natural Gas was up $0.30 (1.6%) to $19.88 on light volume. Throughout the day, 5,796 shares of Delta Natural Gas exchanged hands as compared to its average daily volume of 39,200 shares. The stock ranged in a price between $19.57-$19.89 after having opened the day at $19.59 as compared to the previous trading day's close of $19.57.

Delta Natural Gas Company, Inc. distributes or transports natural gas. It operates in two segments, Regulated and Non-Regulated. The Regulated segment is engaged in the distribution and transmission of natural gas to retail customers in 23 rural counties. Delta Natural Gas has a market cap of $136.1 million and is part of the utilities industry. Shares are down 12.3% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Delta Natural Gas a buy, no analysts rate it a sell, and 1 rates it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Delta Natural Gas as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on DGAS go as follows:

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 29.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DELTA NATURAL GAS CO INC has improved earnings per share by 19.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DELTA NATURAL GAS CO INC increased its bottom line by earning $1.05 versus $0.85 in the prior year. This year, the market expects an improvement in earnings ($1.19 versus $1.05).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Gas Utilities industry average. The net income increased by 21.9% when compared to the same quarter one year prior, going from $4.24 million to $5.17 million.
  • Net operating cash flow has significantly increased by 63.45% to $20.56 million when compared to the same quarter last year. In addition, DELTA NATURAL GAS CO INC has also vastly surpassed the industry average cash flow growth rate of -20.24%.
  • DGAS's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that DGAS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.59 is high and demonstrates strong liquidity.

You can view the full analysis from the report here: Delta Natural Gas Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Pure Cycle ( PCYO) was up $0.10 (1.5%) to $6.59 on light volume. Throughout the day, 31,645 shares of Pure Cycle exchanged hands as compared to its average daily volume of 104,000 shares. The stock ranged in a price between $6.50-$6.63 after having opened the day at $6.55 as compared to the previous trading day's close of $6.49.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area. Pure Cycle has a market cap of $157.4 million and is part of the utilities industry. Shares are up 3.5% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Pure Cycle as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 7.9%. Since the same quarter one year prior, revenues leaped by 64.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PCYO's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.48, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for PURE CYCLE CORP is currently very high, coming in at 79.82%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -56.25% is in-line with the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Water Utilities industry and the overall market, PURE CYCLE CORP's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Pure Cycle Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Centrais Eletricas Brasileiras ( EBR.B) was another company that pushed the Utilities sector higher today. Centrais Eletricas Brasileiras was up $0.08 (1.7%) to $4.91 on average volume. Throughout the day, 59,579 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 76,900 shares. The stock ranged in a price between $4.86-$4.93 after having opened the day at $4.87 as compared to the previous trading day's close of $4.83.

Centrais Eletricas Brasileiras S.A. - Eletrobras, together with its subsidiaries, generates, transmits, and distributes electricity in Brazil. It projects, builds, and operates generating power plants, and electric power transmission and distribution lines. Centrais Eletricas Brasileiras has a market cap of $6.4 billion and is part of the utilities industry. Shares are up 8.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Centrais Eletricas Brasileiras a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Centrais Eletricas Brasileiras as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on EBR.B go as follows:

  • Net operating cash flow has significantly decreased to $758.05 million or 58.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for ELETROBRAS-CENTR ELETR BRAS is currently lower than what is desirable, coming in at 27.17%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EBR.B's net profit margin of 14.06% compares favorably to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market, ELETROBRAS-CENTR ELETR BRAS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • This stock has increased by 32.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in EBR.B do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: Centrais Eletricas Brasileiras Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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