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.

The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 15 points (0.1%) at 17,122 as of Wednesday, Aug. 27, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,719 issues advancing vs. 1,312 declining with 167 unchanged.

The Utilities sector as a whole closed the day up 0.8% versus the S&P 500, which was unchanged. Top gainers within the Utilities sector included Centrais Eletricas Brasileiras ( EBR.B), up 5.4%, Connecticut Water Service ( CTWS), up 1.7%, Brookfield Renewable Energy Partners ( BEP), up 2.1%, Centrais Eletricas Brasileiras ( EBR), up 9.0% and Huaneng Power International ( HNP), up 6.9%.

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

Brookfield Renewable Energy Partners ( BEP) is one of the companies that pushed the Utilities sector higher today. Brookfield Renewable Energy Partners was up $0.62 (2.1%) to $29.78 on light volume. Throughout the day, 23,407 shares of Brookfield Renewable Energy Partners exchanged hands as compared to its average daily volume of 31,600 shares. The stock ranged in a price between $29.26-$29.79 after having opened the day at $29.36 as compared to the previous trading day's close of $29.16.

Brookfield Renewable Energy Partners L.P. owns a portfolio of renewable power generating facilities. Brookfield Renewable Energy Partners has a market cap of $4.2 billion and is part of the energy industry. Shares are up 12.9% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate Brookfield Renewable Energy Partners 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 Brookfield Renewable Energy Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk and weak operating cash flow.

Highlights from TheStreet Ratings analysis on BEP go as follows:

  • The change in net income from the same quarter one year ago has exceeded that of the Independent Power Producers & Energy Traders industry average, but is less than that of the S&P 500. The net income has decreased by 6.8% when compared to the same quarter one year ago, dropping from $44.00 million to $41.00 million.
  • Even though the current debt-to-equity ratio is 1.24, it is still below the industry average, suggesting that this level of debt is acceptable within the Independent Power Producers & Energy Traders industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.46 is very low and demonstrates very weak liquidity.
  • Net operating cash flow has decreased to $180.00 million or 21.39% when compared to the same quarter last year. Despite a decrease in cash flow of 21.39%, BROOKFIELD RNWBL ENRGY PT-LP is still significantly exceeding the industry average of -82.13%.
  • 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 Independent Power Producers & Energy Traders industry and the overall market on the basis of return on equity, BROOKFIELD RNWBL ENRGY PT-LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.

You can view the full analysis from the report here: Brookfield Renewable Energy Partners 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, Connecticut Water Service ( CTWS) was up $0.56 (1.7%) to $33.41 on average volume. Throughout the day, 24,709 shares of Connecticut Water Service exchanged hands as compared to its average daily volume of 24,100 shares. The stock ranged in a price between $32.96-$33.46 after having opened the day at $33.00 as compared to the previous trading day's close of $32.85.

Connecticut Water Service, Inc., through its subsidiaries, operates as a regulated water company. The company operates in three segments: Water Activities, Real Estate Transactions, and Services and Rentals. The Water Activities segment supplies public drinking water. Connecticut Water Service has a market cap of $365.1 million and is part of the energy industry. Shares are down 7.5% year-to-date as of the close of trading on Tuesday. Currently there are 4 analysts who rate Connecticut Water Service 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 Connecticut Water Service as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on CTWS go as follows:

  • CTWS's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 12.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
  • CONNECTICUT WATER SVC INC reported significant earnings per share improvement 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, CONNECTICUT WATER SVC INC increased its bottom line by earning $1.66 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.66).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Water Utilities industry. The net income increased by 73.8% when compared to the same quarter one year prior, rising from $4.31 million to $7.49 million.
  • The gross profit margin for CONNECTICUT WATER SVC INC is rather high; currently it is at 50.89%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.41% significantly outperformed against the industry average.

You can view the full analysis from the report here: Connecticut Water Service 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 $0.29 (5.4%) to $5.65 on heavy volume. Throughout the day, 303,224 shares of Centrais Eletricas Brasileiras exchanged hands as compared to its average daily volume of 75,300 shares. The stock ranged in a price between $5.37-$5.67 after having opened the day at $5.39 as compared to the previous trading day's close of $5.36.

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 $7.0 billion and is part of the energy industry. Shares are up 21.8% year-to-date as of the close of trading on Tuesday. 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 36.43% 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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