VST, GEV, CEG top chart as Utilities services gainers in 2024; AES, ES, AWK among losers

Utilities Select Sector SPDR Fund ETF (NYSEARCA:XLU), which tracks S&P 500 Utilities services sector, made a comeback in 2024 with a gain of 17.81%, compared to over 10% decline in 2023, mainly driven by optimism about the potential growth of electricity demand from data centers and artificial intelligence.

However, in 2024, the sector has underperformed compared to the 24% gain of the benchmark S&P 500 Index. 

According to FactSet analyst John Butters, all eleven sectors are predicted to report year-over-year earnings growth in CY 2025, with earnings and revenue for Utilities sector expected to grow nearly 9% and 4.7%, respectively.

Industries 2024 Performance

Within the index, Electric Utilities gained nearly 19%, Multi-Utilities increased 14.46%, Independent Power Producers surged 32.56%, while Water Utilities declined 6.76% in 2024.

U.S. stock fund flow in and out of the sector was average throughout the year, with some noticeable dips during the month of January and November. The Utilities services-focused ETF had a net outflow of $242.85 million.

Top movers in 2024

• Gainers: Vistra (VST) +257.92%.
• GE Vernova (GEV) +150.61%.
• Constellation Energy (CEG) +91.39%.
• NRG Energy (NRG) +74.51%
• Entergy Corporation (ETR) +49.86%
• Losers: AES Corporation (AES) -33.14%.
• Eversource Energy (ES) -6.95%
• American Water Works (AWK) -5.68%
• Consolidated Edison (ED) -1.91%

What Quantitative Measures say?

XLU received a Buy rating from Seeking Alpha’s Quant Rating system, with a score of 3.76 out of 5. The sector got A+ for liquidity and dividend. However, it got a D- for the risk prospect.

What analysts expect?

Four out of five analysts surveyed by Seeking Alpha in the last 90 days gave the XLU a Buy rating.

Seeking Alpha analyst Blake Winiecki noted that artificial intelligence can enhance the operation of the power grid through higher efficiency and less energy waste.

“As AI works its magic to enhance power grids across the country, the power demand forecasted for artificial intelligence systems to operate is astonishing. 2024 is going to end with around 8 terawatt-hours ((TWh)) of power from AI. Current projections anticipate up to 652 TWh to power AI systems in 2030. That type of increase is almost hard to even comprehend what this could do for XLU and the electric utility industry,” Winiecki added. 

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