3 Utilities Stocks Moving The 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 81 points (0.5%) at 16,920 as of Tuesday, Aug. 19, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,954 issues advancing vs. 1,082 declining with 162 unchanged.

The Utilities sector as a whole closed the day up 0.7% versus the S&P 500, which was up 0.5%. Top gainers within the Utilities sector included ForceField Energy ( FNRG), up 1.6%, Cadiz ( CDZI), up 10.1%, Ormat Technologies ( ORA), up 2.0%, Huaneng Power International ( HNP), up 1.7% and Korea Electric Power ( KEP), up 1.6%.

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

Ormat Technologies ( ORA) is one of the companies that pushed the Utilities sector higher today. Ormat Technologies was up $0.54 (2.0%) to $27.11 on average volume. Throughout the day, 55,917 shares of Ormat Technologies exchanged hands as compared to its average daily volume of 65,800 shares. The stock ranged in a price between $26.57-$27.16 after having opened the day at $26.57 as compared to the previous trading day's close of $26.57.

Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business worldwide. The company operates in two segments, Electricity and Product. Ormat Technologies has a market cap of $1.2 billion and is part of the utilities industry. Shares are down 2.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Ormat Technologies a buy, 1 analyst rates it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Ormat Technologies as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on ORA go as follows:

  • 44.05% is the gross profit margin for ORMAT TECHNOLOGIES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.15% is above that of the industry average.
  • Net operating cash flow has significantly increased by 1947.46% to $35.50 million when compared to the same quarter last year. In addition, ORMAT TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -85.73%.
  • 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 Independent Power Producers & Energy Traders industry and the overall market on the basis of return on equity, ORMAT TECHNOLOGIES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Even though the current debt-to-equity ratio is 1.37, it is still below the industry average, suggesting that this level of debt is acceptable within the Independent Power Producers & Energy Traders industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.98 is weak.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 63.7% when compared to the same quarter one year ago, falling from $25.19 million to $9.14 million.

You can view the full analysis from the report here: Ormat Technologies Ratings Report

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At the close, Cadiz ( CDZI) was up $1.05 (10.1%) to $11.45 on heavy volume. Throughout the day, 205,903 shares of Cadiz exchanged hands as compared to its average daily volume of 36,700 shares. The stock ranged in a price between $10.38-$11.62 after having opened the day at $10.40 as compared to the previous trading day's close of $10.40.

Cadiz Inc. operates as a land and water resource development company in the United States. The company is involved in the water resource, and land and agricultural development activities in San Bernardino County properties. Cadiz has a market cap of $162.9 million and is part of the utilities industry. Shares are up 49.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Cadiz a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Cadiz as a sell. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on CDZI go as follows:

  • CADIZ INC has improved earnings per share by 39.6% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CADIZ INC reported poor results of -$1.46 versus -$1.28 in the prior year.
  • The gross profit margin for CADIZ INC is currently very high, coming in at 100.00%. CDZI has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CDZI's net profit margin of -117350.00% significantly underperformed when compared to the industry average.
  • Along with the stagnant revenue growth, the company underperformed against the industry average of 7.9%. Since the same quarter one year prior, revenues have remained constant. The stagnant revenue growth has not kept the company from increasing earnings per share.
  • This stock has increased by 133.10% 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 CDZI do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • 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 Water Utilities industry average. The net income increased by 36.9% when compared to the same quarter one year prior, rising from -$7.44 million to -$4.69 million.

You can view the full analysis from the report here: Cadiz 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.

ForceField Energy ( FNRG) was another company that pushed the Utilities sector higher today. ForceField Energy was up $0.09 (1.6%) to $5.60 on heavy volume. Throughout the day, 22,673 shares of ForceField Energy exchanged hands as compared to its average daily volume of 14,200 shares. The stock ranged in a price between $5.49-$5.60 after having opened the day at $5.51 as compared to the previous trading day's close of $5.51.

ForceField Energy has a market cap of $88.1 million and is part of the utilities industry. Shares are down 7.7% year-to-date as of the close of trading on Monday.

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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