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Institutional Investors’ Favorite Top Utility Stock

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Institutional ownership 

In this part, we’ll discuss the institutional ownership in the top utility stocks (XLU) during the fourth quarter. Institutions held almost 80% in NextEra Energy (NEE), the biggest utility stock by market cap, during the fourth quarter. The Vanguard Group was the top institutional investor in NextEra Energy and held ~9% as of December 31.

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Why institutional ownership matters

Higher institutional holdings in a stock suggest that sophisticated market participants have more confidence in the stock. Usually, keeping everything else equal, rising institutional holdings indicate a favorable opinion about a stock.

Institutions held ~60% in Duke Energy (DUK) at the end of the fourth quarter. Most of the top institutional investors increased their existing holdings in the utility in the fourth quarter. The Vanguard Group, the largest institutional investor in Duke Energy at the end of the fourth quarter, increased its stake by adding more than net 2.0 million shares of Duke Energy.

Institutional investors held ~62% of Dominion Energy’s (D) total outstanding shares as of December 31. All of the top institutional investors increased their stakes in Dominion Energy during the fourth quarter. According to a recent 13F filing, the Vanguard Group added ~2.0 million shares in Dominion Energy and held 6.7% during the fourth quarter.

Institutional investors held 59% and 76% in Southern Company (SO) and American Electric Power (AEP), respectively, at the end of the fourth quarter.

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