3 Utilities Stocks Moving The Sector Upward

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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.

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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

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