We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FE vs. PNW: Which Utility Stock Is a Better Investment Pick in 2026?
Read MoreHide Full Article
Key Takeaways
FirstEnergy is framed as the better 2026 utility pick after a side-by-side fundamentals review.
FE EPS estimates: $2.73 in 2026 and $2.94 in 2027, implying 7.06% and 7.73% growth.
FE targets $36B investment in 2026-2030; debt-to-capital 65.55% and ROE 10.66%.
Companies operating in the Zacks Utility - Electric Power industry are engaged in generating and delivering electricity to millions of consumers across the United States. The regulated operation of the utilities supports cost recovery and stable returns, while rising customer demand drives earnings growth. They offer attractive dividends and stable returns, making them a reliable defensive investment choice. Utilities are now producing more electricity from clean sources to meet rising demand.
Electricity demand in the United States is rising, driven by higher residential demand, the reshoring of industries and increasing data center demands. Companies operating in this industry are making strategic investments in renewable expansion, grid modernization and strengthening distribution networks to maintain service reliability.
Amid the rising importance of electricity generation, transmission and distribution companies, let us discuss FirstEnergy Corporation (FE - Free Report) and Pinnacle West Capital (PNW - Free Report) . These two electric utilities target carbon neutrality by 2050 and are investing heavily in infrastructure, grid modernization and renewable energy expansion, making them comparable in the utility space.
FirstEnergy, with its regulated structure and operating through subsidiaries, serves millions of customers across the United States. Its strategic capital investment in infrastructure development supports rate base growth and renewable expansion. The company’s ‘Energize365’ is a multi-year grid evolution platform prioritizing customer affordability, with rates at or below those of in-state peers. It enhances service reliability and supports the company’s long-term growth initiatives.
Pinnacle West Capital stands out with its regulated framework and operations through subsidiaries, serving millions of customers across the state of Arizona. The company is aided by strong economic development in its service territories, an expanding customer base, a rise in data center demand and higher commercial activities. PNW invests systematically in expanding renewable assets, grid modernization and infrastructure development, which enhances operational efficiency and strengthens financial performance.
Pinnacle West Capital and FirstEnergy are among the leading utility stocks, and a side-by-side comparison of their fundamentals can help determine which offers the more attractive investment opportunity.
FE & PNW’s Earnings Projections
The Zacks Consensus Estimate for FE’s earnings per share is pegged at $2.73 for 2026 and $2.94 for 2027, suggesting year-over-year growth of 7.06% and 7.73%, respectively. FE’s long-term (three to five years) earnings growth is currently pinned at 7.64%.
Image Source: Zacks Investment Research
On the other side, PNW’s earnings per share are pegged at $4.71 for 2026, suggesting a year-over-year fall of 6.73%, and $5.57 for 2027, suggesting year-over-year growth of 18.13%. PNW’s long-term earnings growth is currently pinned at 6.03%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and regular investment is required for infrastructure and technological upgrades, as well as for expanding operations. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth and service reliability.
Pinnacle West Capital's debt-to-capital ratio currently stands at 60.73% compared to FirstEnergy’s 65.55%. Both companies are using debt to fund their business. PNW and FE’s debt levels are higher than the industry’s 59.94%, with FE’s being higher, indicating greater reliance on borrowed funds.
Return on Equity
Return on Equity (“ROE”) is an important measure reflecting how efficiently a company utilizes shareholders’ funds to generate returns. ROE highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
FirstEnergy’s current ROE is 10.66%, outperforming Pinnacle West Capital, which reports a slightly lower ROE 9.27%. FE utilizes shareholder capital more efficiently and generates higher profits, though both companies’ returns remain below the industry average of 11.09%.
Image Source: Zacks Investment Research
Capital Investment Plans
Utilities’ operations are capital-intensive, as huge funds are required for infrastructure development, enhancing system reliability and maintaining the existing assets. Electric utilities engaged in power generation and distribution are continuously investing in grid modernization, renewable expansion, energy storage and replacement of outdated equipment.
FirstEnergy aims to invest $36 billion in 2026-2030 to strengthen its electric transmission, distribution and generation infrastructure, and expand renewable energy capacity. PNW plans to invest $7.95 billion in 2026-2028 to strengthen generation, distribution and transmission structure, supporting service reliability and rate base growth.
Price Performance
PNW shares have gained 2.3% in the past three months compared to FE’s decline of 8.0%.
Image Source: Zacks Investment Research
Summing Up
FirstEnergy and Pinnacle West Capital are benefiting from rising load growth, driven by data center demand, an expanding customer base and significant infrastructure investments to support millions of customers across the United States.
FE’s stronger earnings estimate revisions, higher return on equity and broader capital expenditure plan make it a more attractive choice in the utility sector.
View the Zacks #1 Rank List
Image: Bigstock
FE vs. PNW: Which Utility Stock Is a Better Investment Pick in 2026?
Key Takeaways
Companies operating in the Zacks Utility - Electric Power industry are engaged in generating and delivering electricity to millions of consumers across the United States. The regulated operation of the utilities supports cost recovery and stable returns, while rising customer demand drives earnings growth. They offer attractive dividends and stable returns, making them a reliable defensive investment choice. Utilities are now producing more electricity from clean sources to meet rising demand.
Electricity demand in the United States is rising, driven by higher residential demand, the reshoring of industries and increasing data center demands. Companies operating in this industry are making strategic investments in renewable expansion, grid modernization and strengthening distribution networks to maintain service reliability.
Amid the rising importance of electricity generation, transmission and distribution companies, let us discuss FirstEnergy Corporation (FE - Free Report) and Pinnacle West Capital (PNW - Free Report) . These two electric utilities target carbon neutrality by 2050 and are investing heavily in infrastructure, grid modernization and renewable energy expansion, making them comparable in the utility space.
FirstEnergy, with its regulated structure and operating through subsidiaries, serves millions of customers across the United States. Its strategic capital investment in infrastructure development supports rate base growth and renewable expansion. The company’s ‘Energize365’ is a multi-year grid evolution platform prioritizing customer affordability, with rates at or below those of in-state peers. It enhances service reliability and supports the company’s long-term growth initiatives.
Pinnacle West Capital stands out with its regulated framework and operations through subsidiaries, serving millions of customers across the state of Arizona. The company is aided by strong economic development in its service territories, an expanding customer base, a rise in data center demand and higher commercial activities. PNW invests systematically in expanding renewable assets, grid modernization and infrastructure development, which enhances operational efficiency and strengthens financial performance.
Pinnacle West Capital and FirstEnergy are among the leading utility stocks, and a side-by-side comparison of their fundamentals can help determine which offers the more attractive investment opportunity.
FE & PNW’s Earnings Projections
The Zacks Consensus Estimate for FE’s earnings per share is pegged at $2.73 for 2026 and $2.94 for 2027, suggesting year-over-year growth of 7.06% and 7.73%, respectively. FE’s long-term (three to five years) earnings growth is currently pinned at 7.64%.
Image Source: Zacks Investment Research
On the other side, PNW’s earnings per share are pegged at $4.71 for 2026, suggesting a year-over-year fall of 6.73%, and $5.57 for 2027, suggesting year-over-year growth of 18.13%. PNW’s long-term earnings growth is currently pinned at 6.03%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and regular investment is required for infrastructure and technological upgrades, as well as for expanding operations. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth and service reliability.
Pinnacle West Capital's debt-to-capital ratio currently stands at 60.73% compared to FirstEnergy’s 65.55%. Both companies are using debt to fund their business. PNW and FE’s debt levels are higher than the industry’s 59.94%, with FE’s being higher, indicating greater reliance on borrowed funds.
Return on Equity
Return on Equity (“ROE”) is an important measure reflecting how efficiently a company utilizes shareholders’ funds to generate returns. ROE highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
FirstEnergy’s current ROE is 10.66%, outperforming Pinnacle West Capital, which reports a slightly lower ROE 9.27%. FE utilizes shareholder capital more efficiently and generates higher profits, though both companies’ returns remain below the industry average of 11.09%.
Image Source: Zacks Investment Research
Capital Investment Plans
Utilities’ operations are capital-intensive, as huge funds are required for infrastructure development, enhancing system reliability and maintaining the existing assets. Electric utilities engaged in power generation and distribution are continuously investing in grid modernization, renewable expansion, energy storage and replacement of outdated equipment.
FirstEnergy aims to invest $36 billion in 2026-2030 to strengthen its electric transmission, distribution and generation infrastructure, and expand renewable energy capacity. PNW plans to invest $7.95 billion in 2026-2028 to strengthen generation, distribution and transmission structure, supporting service reliability and rate base growth.
Price Performance
PNW shares have gained 2.3% in the past three months compared to FE’s decline of 8.0%.
Image Source: Zacks Investment Research
Summing Up
FirstEnergy and Pinnacle West Capital are benefiting from rising load growth, driven by data center demand, an expanding customer base and significant infrastructure investments to support millions of customers across the United States.
FE’s stronger earnings estimate revisions, higher return on equity and broader capital expenditure plan make it a more attractive choice in the utility sector.
Based on the above discussion, FirstEnergy currently has an edge over Pinnacle West Capital, though both presently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.