In 2024 and 2025 so far, the utilities sector has experienced significant developments and will play an increasingly important role across the tech sector to meet the growing energy needs of data centers for AI applications.
A notable trend is a collaboration between unlikely players like tech giants and power companies. For instance, Entergy has partnered with Meta in Louisiana, and major oil companies like Exxon Mobil and Chevron are exploring opportunities in the electricity market.
Regulatory bodies have also been active; the Federal Energy Regulatory Commission (FERC) issued Order Nos. 1920 and 1977 in May 2024, mandating utilities to plan 20 years ahead to enhance grid reliability and accommodate the integration of renewable energy sources.
As the utilities companies position themselves to meet future demands, some will prevail with premium valuations if they partner with companies with seemingly unlimited funds to expand their infrastructure and electricity distribution.
Valuation Multiples for Utilities Companies
In 2024, out of 95 utilities companies trading on major US exchanges, the median revenue multiple is 2.4x, the median EBITDA multiple is 6.7x, and the median PE ratio is 19.5x.
The majority of power utilities companies generate revenue over $1 billion, with almost half of all public utilities companies trading on US exchanges in the revenue range above $5 billion.
Utilities companies is literally a textbook examples in economics courses when describing economies of scale. As such, incumbents who continue to expand their network of infrastructure are the major players and thus most of these companies in the dataset have revenue above $5 billion and only a few below $1 billion range.
Utilities Company Margins
The median gross margin of utilities companies in 2024 is 45%, the median EBITDA margin is 38%, and the median net profit margin is 14%.
Utilities Companies Watchlist
We’ll continue to keep an eye out on partnerships between utilities companies across the US with tech companies, oil companies, and renewable energy companies.
In addition to expanding the power grid infrastructure and the network to distribute electricity, we will also watch out for companies that use AI applications to improve efficiency, thus increasing profitability.
Download and look through the 95 companies in the dataset to analyze each company.
Refresher: Value a company using revenue, value a company using EBITDA.
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