Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Electric Utilities industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.
Why Focus on Undervalued Electric Utilities Stocks?
Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.
AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.
What Goes Into AAII’s Value Grade?
Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.
AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.
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3 Undervalued Electric Utilities Stocks
Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Electric Utilities industry for Friday, April 04, 2025. Let’s take a closer look at their individual scores to see how they measure up against each other and the Electric Utilities industry median.
| Company | Ticker | Price/Sales | Price/Earnings | EV/EBITDA | Shareholder Yield | Price/Book Value | Price/Free Cash Flow | Value Grade |
| Hawaiian Electric Industries, Inc. | HE | na | na | 8.9 | 0.0% | 1.18 | 9.2 | B |
| NRG Energy, Inc. | NRG | 0.70 | 18.6 | 6.9 | 10.5% | 7.60 | 13.4 | B |
| Pampa Energía S.A. | PAM | 0.07 | 185.5 | 5.7 | 21.6% | 0.03 | na | A |
The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.
The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)
Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).
As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.
Hawaiian Electric Industries, Inc.’s Value Grade
Value Grade:
| Metric | Score | HE | Industry Median |
| Price/Sales | na | na |
2.12 |
| Price/Earnings | na | na |
21.0 |
| EV/EBITDA | 32 | 8.9 | 11.4 |
| Shareholder Yield | 52 | 0.0% |
2.8% |
| Price/Book Value | 43 | 1.18 |
1.82 |
| Price/Free Cash Flow | 25 | 9.2 |
10.8 |
Hawaiian Electric Industries, Inc., together with its subsidiaries, engages in the electric utility business in the United States. It operates through Electric Utility and Other segments. The Electric Utility segment engages in the production, purchase, transmission, distribution, and sale of electricity in the islands of Oahu; Hawaii; and Maui, Lanai, and Molokai. This segment’s renewable energy sources and potential sources include wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other biofuels. This segment serves suburban communities, resorts, the United States Armed Forces installations, and agricultural operations. The Other segment invests in non-regulated renewable energy and sustainable infrastructure in the State of Hawaii. Hawaiian Electric Industries, Inc. was founded in 1891 and is headquartered in Honolulu, Hawaii.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Hawaiian Electric Industries, Inc. has a Value Score of 69, which is considered to be undervalued.
Now, let’s assess Hawaiian Electric Industries, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 8.9, when compared to the industry median of 11.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.
Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Hawaiian Electric Industries, Inc.’s shareholder yield is lower than its industry median ratio of 2.85%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.
As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Hawaiian Electric Industries, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.82. This could make Hawaiian Electric Industries, Inc. more attractive to investors looking for a new addition to their portfolio.
Lastly, let’s take a look at Hawaiian Electric Industries, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Hawaiian Electric Industries, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 10.80. This could make Hawaiian Electric Industries, Inc. more attractive because the lower P/FCF ratio indicates that Hawaiian Electric Industries, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company’s cash flow to share price value is generally improving or worsening.
NRG Energy, Inc.’s Value Grade
Value Grade:
| Metric | Score | NRG | Industry Median |
| Price/Sales | 28 | 0.70 |
2.12 |
| Price/Earnings | 53 | 18.6 |
21.0 |
| EV/EBITDA | 21 | 6.9 | 11.4 |
| Shareholder Yield | 6 | 10.5% | 2.8% |
| Price/Book Value | 90 | 7.60 | 1.82 |
| Price/Free Cash Flow | 37 | 13.4 | 10.8 |
NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada. It operates through Texas; East; West/Services/Other; Vivint Smart Home; and Corporate Activities segments. The company produces and sells electricity generated using coal, oil, solar, and battery storage; natural gas; and a cloud-based home platform, including hardware, software, sales, installation, customer service, technical support, and professional monitoring solutions. It offers retail electricity and energy management, line and surge protection products, HVAC installation, repair and maintenance, home protection products, repair and maintenance, and carbon offsets; retail services comprising demand response, commodity sales, energy efficiency, and energy management solutions; and system power, distributed generation, renewable and low-carbon products, carbon management and specialty services, backup generation, storage and distributed solar, and energy advisory services. In addition, the company trades in power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. It offers its products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. It serves residential, commercial, government, industrial, and wholesale customers. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
NRG Energy, Inc. has a Value Score of 67, which is considered to be undervalued.
NRG Energy, Inc.’s price-earnings ratio is 18.6 compared to the industry median at 21.0. This means that it has a lower price relative to its earnings compared to its peers. This makes NRG Energy, Inc. more attractive for value investors.
NRG Energy, Inc.’s price-to-book ratio is lower than its peers. This could make NRG Energy, Inc. more attractive for value investors when compared to the industry median at 1.82.
You can read more about NRG Energy, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Pampa Energía S.A.’s Value Grade
Value Grade:
| Metric | Score | PAM | Industry Median |
| Price/Sales | 3 | 0.07 |
2.12 |
| Price/Earnings | 97 | 185.5 |
21.0 |
| EV/EBITDA | 15 | 5.7 | 11.4 |
| Shareholder Yield | 2 | 21.6% | 2.8% |
| Price/Book Value | 1 | 0.03 | 1.82 |
| Price/Free Cash Flow | na | na | 10.8 |
Pampa Energía S.A. operates as an integrated power company in Argentina. The company operates through Oil and Gas; Generation; Petrochemicals; and Holding, Transportation and Others segments. It generates electricity through thermal plants, hydroelectric plants, and wind farms with a 5,472 megawatt (MW) installed capacity. The company also explores for and produces oil and gas in the provinces of Neuquén and Río Negro. In addition, it produces petrochemicals, such as styrene, synthetic rubber, and polystyrene. Further, the company operates and maintains a 22,396 km high-voltage electricity transmission network in Argentina. Additionally, it holds a concession for the transportation of natural gas with 9,248 km of gas pipelines in the center, west, and south of Argentina; and processes and sells natural gas liquids in Bahía Blanca in the Province of Buenos Aires, as well as offers related advisory services. The company was formerly known as Pampa Holding S.A. and changed its name to Pampa Energía S.A. in September 2008. Pampa Energía S.A. was incorporated in 1945 and is based in Buenos Aires, Argentina.
Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.
Pampa Energía S.A. has a Value Score of 92, which is considered to be undervalued.
Pampa Energía S.A.’s price-earnings ratio is 185.5 compared to the industry median at 21.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Pampa Energía S.A. less attractive for value investors.
Pampa Energía S.A.’s price-to-book ratio is higher than its peers. This could make Pampa Energía S.A. less attractive for value investors when compared to the industry median at 1.82.
You can read more about Pampa Energía S.A.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.
Other Electric Utilities Stock Grades
Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.
Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Electric Utilities stocks as well as other industrys.
Choosing Which of the 3 Best Electric Utilities Stocks Is Right for You
Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.
- Hawaiian Electric Industries, Inc. stock has a Value Grade of B.
- NRG Energy, Inc. stock has a Value Grade of B.
- Pampa Energía S.A. stock has a Value Grade of A.
Now that you have a bit more background about each of the 3 undervalued stocks in the Electric Utilities industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.
We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.
A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.
Additional Resources About Electric Utilities Stocks
Want to learn more about Electric Utilities stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.
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