Currently, US utility stocks are trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11x—higher than the historical average of 8x–9x. They seem to be trading at a large premium considering their PE (price-to-earnings) multiple. Historically, they traded at a PE ratio of ~14x–15x, while their current PE multiple is beyond 18x–19x.
Utility stocks (VPU) have been rising in the past few months, despite being overvalued. Their premium dividend yield could be one of the main reasons why investors are sheltering under utility stocks.