PPL vs. FirstEnergy: Which Utility Is Positioned for Stronger Growth?

Amid the growing clean energy market and rising electricity demand from data centers, PPL Corporation PPL and FirstEnergy FE are emerging as appealing investment opportunities. As major regulated electric utilities, both companies are making strategic investments in grid infrastructure upgrades to enhance reliability and support long-term growth.

Utility service providers are benefiting from several favorable factors, including higher electricity tariffs, accretive acquisitions, cost-reduction measures and the implementation of energy-efficiency initiatives. The industry is also benefiting from ongoing efforts to enhance grid resilience against adverse weather events and from the continued transition toward cost-effective renewable energy sources.

To address the growing power requirements of data centers, providers are investing in capacity expansion. As the energy transition accelerates, U.S. electric utilities are evolving beyond traditional revenue generators. Climate-focused policies and federal incentives are reshaping the sector, positioning leading utilities for steady, low-risk growth while offering investors exposure to the expanding clean energy landscape.

Now let's compare the two stocks' fundamentals to find out which one is a better investment pick at present.

Factors in Favor of PPL Stock

PPL is expanding its operations through the construction of new generation, transmission and distribution projects. The company is also benefiting from strategic investments in clean energy generation, which are expected to support its goal of achieving carbon neutrality by 2050. As part of its “Utility of the Future” strategy, PPL is undertaking an IT transformation to standardize systems, engineering and operations across its utilities, aiming to strengthen and automate the grid, improve storm resilience, and meet growing customer demand more efficiently.

PPL’s subsidiaries are benefiting from economic development in their service regions, driven by rising demand from data centers. The company is experiencing strong load growth supported by this trend. In Pennsylvania, nearly 25.2 GW of potential data center demand — up from 20.5 GW — is in advanced stages of development. In its Kentucky segment, the economic development queue reflects potential load growth of 9.3 GW through 2032.

Factors in Favor of FE Stock

FirstEnergy’s earnings trajectory has been stabilized by its efforts to diversify its regulated generation mix. Over the past few years, the company has successfully expanded its regulated operations and completed its transition to a fully regulated utility. FirstEnergy is seeing growing data center development across its service areas and is well positioned to capitalize on the accelerating expansion of data centers, both within its territory and across the broader region.

FE’s long-term pipeline demand has climbed to 12.9 GW, more than doubling from 6.1 GW in February 2025 and increasing 10% from 11.7 GW in November 2025. Long-term contracted demand has reached 4.1 GW, up more than 40% from 2.9 GW in February 2025 and 8% higher than 3.8 GW in November 2025.

How Do Zacks Estimates Compare for PPL & FE?

The Zacks Consensus Estimate for PPL’s 2026 earnings per share (EPS) indicates a decrease of 0.51% over the past 60 days. PPL’s long-term (three to five years) earnings growth rate is 7.34%.
 

The Zacks Consensus Estimate for FirstEnergy's 2026 EPS indicates an increase of 0.37% over the past 60 days. FE’s long-term earnings growth rate is 6.46%.

PPL & FE’s Return on Equity (ROE)

ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. PPL’s current ROE is 9.29% compared with FirstEnergy's 10.5%.

PPL & FE’s Strategic Investment Plans

PPL has increased its planned capital expenditures to $23 billion for the 2026-2029 period from $20 billion for 2025-2028, reflecting a stronger commitment to expanding and modernizing its infrastructure, including generation, transmission and distribution assets.

FirstEnergy has a capital investment plan of $36 billion for the 2026-2030 period, reflecting an increase of nearly 30% compared to its previous five-year investment plan.  

PPL & FE’s Price Performance

In the past three months, shares of PPL and FirstEnergy have increased 5.1% and 6.9%, respectively.

PPL & FE’s Dividend Yield

Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for PPL is 2.82% compared to the Zacks S&P 500 composite’s average of 1.08%, and the same for FirstEnergy is 3.52%.

Debt Position of PPL & FE

PPL and FirstEnergy have a debt-to-capital of 56.85% and 65.6%, respectively, compared with the industry’s 61.05%. 

Currently, the times interest earned (TIE) ratio for PPL is 2.8, and the same for FE is 2.3. Both companies have maintained their TIE ratio at more than 1 for over a decade now. This indicates that they have enough financial flexibility to meet their near-term debt obligations.

PPL or FE: Which Is a Better Pick Right Now?

PPL is benefiting from grid expansion, clean energy investments and IT-driven modernization, while rising data center demand is driving load growth across its service regions. FirstEnergy has strengthened its fully regulated business model and diversified operations, positioning it to capitalize on accelerating data center development, supported by a rapidly expanding pipeline and growing long-term demand commitments.

Both companies have the capacity to improve further and expand their operations to meet the growing demand. 

However, our choice at the moment is FirstEnergy, given its improving earnings growth, better ROE, dividend yield and price performance than PPL. Both PPL and FE stocks have a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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