Utilities (XLU) have returned more than 5% and have outperformed broader markets in 2018. We have considered the capital appreciation and dividends paid in a particular period to calculate the total returns. Recently, the technology (XLK) sector witnessed noteworthy weakness. The sector has fallen more than 15% since early October.
The total returns from the healthcare (XLV) sector have been 9%, while energy (XLE) stocks have returned -10% year-to-date.
Utility (VPU) (IDU) stocks offer an average dividend yield of 3.3%, which is a 150 basis point premium to broader markets’ yield and a mere 15 basis point premium to ten-year Treasury yields. Investors turned to relatively safe utilities during the market turmoil due to their stable stock price movements and superior dividend yields.
Generally, utilities offer stable dividends. To learn more, read Comparing NextEra Energy and Dominion Energy’s Dividend Profiles.