Assessing Competitive Utility Peers: EXC and FE
In 2013, Exelon (EXC) trimmed its dividend by nearly 40% and dented investor returns. In the past five years, Exelon’s returns including dividends come to 4%, compounded annually.
During the same period, the Utilities Select Sector SPDR ETF (XLU) has returned 12%, compounded annually, while the SPDR S&P 500 (SPX-INDEX) (SPY) has returned 14%, compounded annually, in the past five years.
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Exelon has outperformed peers over the past year, mainly due to a stock rally, and has significantly underperformed broader utilities and broader equities over the past three-year and five-year time periods.
Peer FirstEnergy’s (FE) returns over the past year have come in at -3%, while over the past five years, FE has returned -2%, compounded annually. FirstEnergy’s double whammy of a dividend cut and a stock fall hit investors during this period.
You can read more about the total returns of top utility stocks in Market Realist’s “NextEra’s Total Returns Surpass Returns of Other Utility Giants.”
Continue to the next part of this series for a closer look at Exelon’s valuation.