Out of the 40 utilities we track, only four gained during the week ended August 14, while the remaining 36 ended in red. However, the utilities sector performed better than the broader market. The Utility Select Sector SPDR ETF (XLU) lost 1.2%, outperforming the broader market. The broad-based SPDR S&P 500 ETF (SPY) lost a whopping 6% during the week.
US Treasury yields fell substantially over the week of August 21 on global updates. Concerns over China’s (and in turn global) growth continue to make headlines. While a fall in Treasury yields should ideally benefit utilities, the concerns far outweighed the benefit from the fallen yields, resulting in falling utility stock prices.
Out of four top gainers, three were large-cap utilities, including the biggest of them all. Edison International (EIX) gained 1.6% to end the week at $62.14 with a market capitalization of $20.2 billion and a dividend yield of 2.6%. During the week, Deutsche Bank (DB) upgraded EIX to a “buy” recommendation.
CMS Energy (CMS) gained 0.7% to $35.56 with a dividend yield of 3.15%, while Duke Energy (DUK), the largest American power utility, gained 0.4% to end the week at $76.71 with a dividend yield of 4.1%. Dominion Resources (D) recorded marginal gains and closed at a dividend yield of 3.3%.
Mid-cap utilities were the biggest losers, as evidenced by the fact that all four top losers were utilities with a market capitalization of less than $10 billion. AES (AES) lost 6.3% to end the week at $12 with a dividend yield of 2.5%. NRG Energy (NRG) lost 5.8% to end the week at $19.58 with a dividend yield of 2.3%. Calpine and OGE Energy dropped 5.6% and 3.5%, respectively.