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Analyzing How Utilities Performed Last Week

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Jan. 22 2019, Updated 1:29 p.m. ET

XLU lagged broader markets

Last week, utilities started on a weak note. The Utilities Select Sector SPDR ETF (XLU) fell marginally, while the S&P 500 rose almost 3% in the week ending January 18. So far in 2019, utility stocks have underperformed broader markets, which have gained ~7%.

The benchmark ten-year Treasury yield trended higher last week. The yield increased from 2.70% and closed at 2.78%. Utility stocks and Treasury yields usually trade inversely to each other.

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Gains and losses

PG&E (PCG) stock was in the news last week. The stock fell more than 60% after disclosing its plans to file for Chapter 11 bankruptcy. The utility is facing $30 billion in liabilities associated with wildfires in 2017 and 2018.

NextEra Energy (NEE) rose marginally last week. The company is scheduled to report its fourth-quarter and fiscal 2018 earnings on January 25. Based on analysts’ estimates, NextEra Energy is expected to report EPS growth of 23% YoY.

Southern Company (SO) and Duke Energy (DUK) rose more than 1% each last week. Southern Company declared a quarterly dividend of $0.60 per share last week, which implies an annualized dividend of $2.40 per share. Southern  Company is one of the top-yielding stocks with a yield of 5.1%—compared to an average yield of 3.3%.

Consolidated Edison (ED) declared a dividend of $0.74 per share—an increase of 3.5% compared to the previous quarter. Consolidated Edison’s dividend increased for the 45th consecutive year.

American Electric Power (AEP) stock gained more than 2%, while PPL (PPL) stock rose 1.9% last week.

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