However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.          

Among the nearly 120 stocks listed under utilities in the CAPS' screener, we've unearthed a few with the maximum five-star rating. Those accolades mean our 140,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about the five below:

Company

CAPS Rating Today

Recent Price

52-Wk Price Change

Est. LT Growth Rate

Companhia Energetica Minas Gerais (NYSE:CIG)

*****

$14.80

(6%)

8%

Energen (NYSE:EGN)

*****

$43.24

(20%)

5%

Pepco (NYSE:POM)

*****

$13.93

(40%)

6%

Pinnacle West Capital (NYSE:PNW)

*****

$32.47

(6%)

6%

TECO Energy (NYSE:TE)

*****

$13.35

(18%)

8%

Source: Motley Fool CAPS; Yahoo! Finance.

Even though the average company in the utility sector lost about 16% of its value over the past year, there were still some notable performers. China Natural Gas' shares sit 17% higher after shaking the market a few months ago. Let's see why investors think some of these struggling companies won't make the leap from the frying pan into the fire.

Some spring in its step
When we were embracing $4-a-gallon gasoline last year, consumers got serious about their energy consumption -- and not just in their cars. As natural gas prices soared as well, we began dialing back the thermostat, cutting nationwide power consumption by 1.6% in 2008.

Strangely, we didn't stop cutting back, even when commodity prices cratered. Oil dipped below $40 a barrel earlier this year (though it's back up in the $70s again today), and natural gas prices remain in record low territory. Perhaps because we don't really believe those low prices are here to stay, we haven't ratcheted up the thermostats yet.

Government analysts expect power consumption to fall again this year by 2.7%, the first time since 1949 we've had back-to-back years of declining energy demand. Manufacturing and industrial demand could be 10% lower, according to forecasts.

What's good for consumers and businesses isn't so good for the utilities, which typically purchase at least a portion of their power needs based on spot natural gas prices. Duke Energy (NYSE:DUK), for example, supplies about 10% of its gas needs on the spot market, as does Pepco. NRG Energy (NYSE:NRG), however, says it operates its entire fleet of natural gas plants on a spot basis;  not all of them may run, and buying power on a forward fixed price isn't prudent.

Things haven't gone as smoothly for Pepco. Operating revenue dropped 18% this year, and weather-adjusted regulated kilowatt hour sales fell more than 4%. Generation output was down 44% in the quarter, and Fitch Ratings lowered the company's outlook to "negative" because of severely depressed energy prices.

While Pepco is one of a number of utilities making a bid for some exciting Smart Grid opportunities, CAPS member KyrieLoon likes it because it's otherwise dull:

Pepco Holdings is another one of those boring utility companies that deliver electricity and natural gas (to Delaware, Maryland, New Jersey, and Washington, DC., in the case of POM). It pays a boringly consistent dividend (currently just over 7.5%), quarter after quarter, year after year, for as long as people want to heat and light their homes. Bore me all the way to the bank.

The ball's in your court
Many factors go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.

Duke Energy is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.