Utilities underperformed S&P 500
Broader markets continued to rally throughout most of the week and closed lower on June 21 due to geopolitical tensions with Iran. Utilities rose 0.3%, while the S&P 500 rose 1.6% for the week ending June 21. So far in 2019, utility stocks have risen almost 15%, while broader markets have risen more than 17%.
The Utilities Select Sector SPDR ETF (XLU) declared a quarterly distribution of $0.4855 per unit on June 21. The dividend will be paid on June 26 to shareholders on record as of June 24.
Leaders and laggards
The top regulated utility stocks, Southern Company and Duke Energy (DUK) rose 1.1% and 1.9%, respectively, last week. On June 21, Southern Company announced that Southern Power, the utility’s wholesale power provider, invested in utility-scale fuel cell generation with Bloom Energy. Southern Company and Bloom Energy formed a strategic alliance to focus on innovative fuel cell solutions in 2016.
The biggest utility stocks by market cap, NextEra Energy (NEE), Southern Company (SO), and Dominion Energy (D) hit their respective 52-week highs last week.
PG&E (PCG) stock rose more than 24% last week. Gavin Newson, California’s governor, is pushing lawmakers for a wildfire fund. The fund would be financed through bonds, which could help state utilities pay related liabilities. Sempra Energy (SRE) and Edison International (EIX) rose 2.4% and 10% last week.
PPL (PPL) stock rose almost 1% last week. Guggenheim Securities raised PPL’s target price from $29.0 to $34.0 on June 21.