On February, the Utilities Select Sector SPDR ETF’s (XLU) implied volatility was close to 13%—lower than its 15-day average. Implied volatility indicates investors’ sentiment, with rising volatility associated with falling stock prices.
Although utilities are considered slow and steady stocks, their implied volatility has been higher than the S&P 500’s. Among utilities, PG&E (PCG) has the highest volatility, of ~86%. It filed for bankruptcy last week, and in the week prior, its volatility reached ~200%.
NextEra Energy’s (NEE) and Duke Energy’s (DUK) implied volatility is ~14%, while the S&P 500’s is 13%. For more on these stocks, read Four Top-Yielding Stocks from S&P 500 Utilities. Next, we’ll look at analysts’ views on top utilities.