There are only 8 utility stocks that I can find that trade under $5 a share. You can see the full list on the cheap utility stocks page. Sometimes stocks are cheap because they are undiscovered rising stars, and sometimes its because the business is in trouble.

Except for Transportation De Gas Del Sur and RRI Energy all the stocks on this list do not have positive earnings per share. That makes each of those stocks very risky because they on the clock. Once they burn through whatever capital they have left they will go out of business unless they can start turning positive earnings. Let’s focus on the two low priced stocks that are earning.

Transportadora de Gas del Sur – TGS
TGS transports natural gas and does most of it’s business in Argentina. This stock is very lightly traded with an average volume of around 20k per day. The P/E ratio is very very high, and EPS is barely positive at .02. Interestingly EPS is the same as the dividend so they look like they are paying out all of the company earnings in dividends to shareholders. I’m sure a lot of investors are excited about the one year target estimate from the professional coverage of this stock. They are predicting it to hit 17.10 within one year so for some traders this stock has a lot of upside. TGS has been climbing higher consistently over the last year.

RRI Energy – RRI
RRI energy provides energy wholesale services to customers in the US. The basic financials look much better with RRI, but the one year target estimate is low compared to TGS. EPS is .79 and the P/E is 5.94. Average volume for RRI is almost 10M. Over the last year RRI has been up and down, but its been trending down every since November of 2009.