PPL Corp

The struggling European utilities sector encountered another obstacle in the form of Brexit. Upcoming policy changes will pave the way for them in the future.

Utility stocks seem overvalued. Utilities have reached record levels. They have been trading at inflated valuations for months.

PPL (PPL), the top-yielding stock among the S&P 500 Utilities, has underperformed its peers in terms of total returns in 2018.

PPL (PPL) stock offers an attractive potential upside of more than 13% in a year with a mean target price of $32.3. PPL stock is trading at $28.5.

PPL Corporation (PPL) stock was particularly hit by the recent utilities turmoil. Its valuation fell significantly over the last few months.

Duke Energy’s (DUK) adjusted return on equity stayed below 8% due to volatile earnings from international operations. This ROE was on the lower side of the industry average.

AES’s (AES) dividend yield has improved significantly in the last couple of years. The 10% fall in dividends in 2016 is among one of the highest in the industry.

At the end of the first quarter of 2016, PPL’s total debt stood at $19.8 billion. Of this amount, $18 billion was long-term debt.

PPL is concentrated in the UK. It manages utility operations through PPL Global, PPL Electric, Louisville Gas and Electric, and Kentucky Utilities.

American Electric Power has a geographically diversified market combination, with a major chunk of its revenue coming from its homeland Ohio.

Demand growth for electricity in the last decade has been sluggish due to increasingly energy-efficient devices and equipment.

The industry’s supply chain consists of three broad categories—generation, transmission, and distribution. Power generation requires a fuel source—for example, coal, nuclear, natural gas, or wind—and a power plant to convert the fuel source into electricity.