3 Stocks Advancing The Utilities Sector

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 78.22 points (-0.4%) at 17,774 as of Tuesday, Dec. 9, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,227 issues advancing vs. 1,763 declining with 144 unchanged.

The Utilities sector as a whole closed the day up 0.8% versus the S&P 500, which was down 0.2%. Top gainers within the Utilities sector included Pure Cycle ( PCYO), up 3.3%, Spark Energy ( SPKE), up 3.0%, Artesian Resource ( ARTNA), up 1.6%, York Water ( YORW), up 3.7% and Middlesex Water ( MSEX), up 3.3%.

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

Artesian Resource ( ARTNA) is one of the companies that pushed the Utilities sector higher today. Artesian Resource was up $0.33 (1.6%) to $21.75 on light volume. Throughout the day, 10,769 shares of Artesian Resource exchanged hands as compared to its average daily volume of 22,800 shares. The stock ranged in a price between $21.31-$21.85 after having opened the day at $21.45 as compared to the previous trading day's close of $21.42.

Artesian Resources Corporation, through its subsidiaries, provides water, wastewater, and other services on the Delmarva Peninsula. It distributes and sells water to residential, commercial, industrial, municipal, and utility customers in the states of Delaware, Maryland, and Pennsylvania. Artesian Resource has a market cap of $172.8 million and is part of the energy industry. Shares are down 6.1% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Artesian Resource a buy, 1 analyst rates 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 Artesian Resource as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on ARTNA go as follows:

  • 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 27.4% when compared to the same quarter one year prior, rising from $2.60 million to $3.32 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $6.94 million or 21.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.14%.
  • The gross profit margin for ARTESIAN RESOURCES is rather high; currently it is at 50.07%. 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 16.92% trails the industry average.
  • ARTESIAN RESOURCES has improved earnings per share by 27.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARTESIAN RESOURCES reported lower earnings of $0.93 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.93).

You can view the full analysis from the report here: Artesian Resource 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, Spark Energy ( SPKE) was up $0.42 (3.0%) to $14.23 on light volume. Throughout the day, 12,065 shares of Spark Energy exchanged hands as compared to its average daily volume of 34,700 shares. The stock ranged in a price between $13.60-$14.24 after having opened the day at $13.90 as compared to the previous trading day's close of $13.81.

Spark Energy has a market cap of $41.9 million and is part of the energy industry. Shares are unchanged year-to-date as of the close of trading on Monday.

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

Pure Cycle ( PCYO) was another company that pushed the Utilities sector higher today. Pure Cycle was up $0.14 (3.3%) to $4.42 on light volume. Throughout the day, 23,445 shares of Pure Cycle exchanged hands as compared to its average daily volume of 55,200 shares. The stock ranged in a price between $4.23-$4.49 after having opened the day at $4.24 as compared to the previous trading day's close of $4.28.

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area, the United States. Pure Cycle has a market cap of $106.7 million and is part of the energy industry. Shares are down 32.4% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Pure Cycle a buy, no analysts rate it a sell, and none rate it a hold.

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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from TheStreet Ratings analysis on PCYO go as follows:

  • PCYO's very impressive revenue growth greatly exceeded the industry average of 8.6%. 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.
  • PCYO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.88%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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.

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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