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Why Utilities Could Keep Smashing in the Fourth Quarter
Despite valuation concerns, utility stocks seem relatively well placed at the moment, especially going into October, compared to broader markets.
Utility Stocks: What to Expect in the Future
Utility stocks have outperformed broader markets. Over the past 12 months, utilities (XLU) have returned 19% including dividends, while the S&P 500 has returned 9%.
How Utilities’ Returns Compare with Broader Markets’
Utility stocks, generally seen as bond substitutes due to their stable dividends, have rallied significantly.
Comparing Utility Stocks and Treasury Yields
The benchmark ten-year Treasury yields closed at 2.5% last week. Treasury yields and utility stocks usually trade inversely to each other.
XLU: What Utilities’ Chart Indicators and Short Interests Mean
The Utilities Select Sector ETF (XLU) briefly crossed ~$59.0 last week and then came down.
Utilities Beat Broader Markets in the Long Term
Utilities have been an effective hedge against market uncertainty. They have also beaten broader markets in the longer term.
Comparing Utilities’ Total Returns with Broader Markets
In the last five years, utilities on average returned 70% and beat the S&P 500 marginally. Utilities outperformed broader markets.
XLU’s Chart Indicators and Short Interest
Currently, the Utilities Select Sector SPDR ETF (XLU) is trading at $58.2 after hitting an all-time high of $58.7 last week.
AEP, EXC, and Other Utilities: Analysts’ Views and Price Targets
In this series, we’ll take a look at what Wall Street analysts currently think of some of the big utility names.
Analyzing the Valuations of the Top-Performing Utility Stocks
All the stocks under consideration in this series are currently trading at their respective multiyear highs.
A Look at the Market Performances of the Top-Performing Utilities
NextEra Energy (NEE), NiSource (NI), and CMS Energy (CMS) have beaten their peers as well as the broader markets in terms of total returns in the last five years.
XLU: How Utilities Fared against Broader Markets Recently
Utilities notably outperformed broader markets over the past 12 months.
XLU: Where Utility Stocks Might Go from Here
The Utilities Select Sector SPDR ETF (XLU) is currently trading at $57.55, almost 6% above its 50-day and 7% above its 200-day moving average levels.
FirstEnergy’s Valuation Compared to Its Peers
FirstEnergy (FE) stock was one of the top performers among utilities last year. In the last 12 months, the stock has risen ~25%.
FE, AEP, and EXC: Analyzing Utilities’ Current Valuation
FirstEnergy (FE) stock looks to be trading at an attractive valuation, considering its lower valuation multiple against its historical average and peers’ averages.
XLU: Where Utilities Could Go from Here
The Utilities Select Sector SPDR ETF (XLU) is currently trading at $57.13, more than 5% and 7% above its 50-day and 200-day moving averages, respectively.
PPL, SRE, and XEL: Analyzing Utilities’ Current Valuation
PPL (PPL) is trading at a forward PE ratio of 13x based on analysts’ EPS estimates for 2019. PPL appears to be trading at a discounted valuation.
How Utilities Fared against Benchmark Treasury Yields
The ten-year Treasury yield trended higher and closed at 2.65% last week. Utility stocks and Treasury yields usually trade inversely.
Duke Energy: Who Added Big Positions in Q4?
Most of the top institutional investors increased their existing holdings in Duke Energy (DUK)—the largest regulated utility in the country.
Utilities’ Returns Compared to Broader Markets
Utilities outperformed broader markets in the last 12 months. The Utilities Select Sector SPDR ETF’s (XLU) total returns were 15%.
How Institutional Investors Played XLU in Q4
At the end of the fourth quarter, Goldman Sachs was the top institutional investor in the Utilities Select Sector SPDR ETF (XLU).
FirstEnergy Stock: What Can Investors Expect?
FirstEnergy (FE) stock is trading close to its 52-week high. The stock continues to look strong based on its simple moving average levels.
Duke Energy: What Analysts Expect from Its Q4 Earnings
Duke Energy (DUK), the second-largest utility by market cap, is scheduled to report its fourth-quarter and fiscal 2018 earnings on February 14.
Sempra Energy and Edison International’s Current Valuations
Sempra Energy is currently trading at a forward PE ratio above 19x based on analysts’ earnings estimates for the next 12 months.
XLU, NEE, and SO: Analyzing Top Utilities’ Chart Indicators
The Utilities Select Sector SPDR ETF (XLU) is trading at $54.55, almost 1% and 3% above its 50-day and 200-day moving averages of $54 and $52.90, respectively, suggesting strength.
PG&E Files for Chapter 11 Bankruptcy, Stock Rises 5%
On January 29, wildfire-stricken PG&E filed for voluntary Chapter 11 bankruptcy protection. The utility faces ~$30 billion in potential liabilities.
XLU: Where Utility Stocks Might Go from Here
XLU is trading at $53.3, which is almost 1% below its 50-day and ~1% above its 200-day moving average levels.
How Utilities Are Placed Going Forward
Utilities currently offer a handsome total return potential based on analysts’ price targets and their superior dividend yields.
Comparing Utilities and Treasury Yields
The benchmark ten-year Treasury yield trended lower and changed from 2.68% to 2.66% last week.
Utilities versus Broader Markets’ Total Returns
Utilities played out well last year amid broader markets’ volatility. They returned more than 6%, while the S&P 500 returned -6% last year.
Utilities Beat Broader Markets: Total Returns in 2018
Utilities have outperformed broader markets in 2018. Including dividends, broader utilities have returned ~6%, while SPY has returned -8% YTD.
Utilities Trade Inversely to Interest Rates
The ten-year Treasury yield has fallen 11% since it peaked in early November. Utilities at large have risen more than 4% during this period.
The Top Ten S&P 500 Utility Stocks by Market Capitalization
The Utilities Select Sector SPDR ETF (XLU), which represents S&P 500 utilities, hit a 52-week high of $56.80 on December 4.
Dominion Energy Has Attractive Dividend Profile
Dominion Energy (D), the third largest utility stock by market cap in the country, is currently trading at a dividend yield of 4.5%, notably higher than the broader utilities’ average.
Utilities’ Returns Compared to Other Sectors in 2018
Utilities (XLU) have returned more than 5% and have outperformed broader markets in 2018.
Institutional Activity in Entergy in Q3 2018
According to its latest 13F filing, The Vanguard Group increased its stake in Entergy Corporation (ETR) close to 12% in the quarter ended September 30.
How Institutional Investors Played XLU in Q3 2018
Utilities at large are up almost 3% so far this year, marginally outperforming broader markets. Investors turned to the relatively safe utilities lately amid trade war tensions and a recent broad-market selloff.
XLU: What Do Utilities’ Chart Indicators Currently Suggest?
The Utilities Select Sector SPDR ETF (XLU) is trading at $54.87—more than 2% and 6% above its 50-day and 200-day moving average levels.
Southern Company Beats Q3 Estimates, Maintains Vogtle Schedule
Southern Company (SO), the fourth-biggest utility by market capitalization, released its third-quarter earnings on November 7.
XLU: What Utilities’ Chart Indicators Suggest
After a strong October, utility (IDU) (VPU) stocks started November off on a relatively weak note.
Duke Energy Beats Q3 Earnings Estimates and Raises Guidance
Duke Energy (DUK), the second-largest utility by market cap, reported its third-quarter earnings today.
What to Expect from Southern Company’s Q3 Revenues
Southern Company (SO), one of the largest regulated utilities, is expected to report its third-quarter results on November 7.
Southern Company Stock: Is There More Weakness Brewing?
Southern Company (SO), the second-largest regulated utility in the country, rose 5% in October and outperformed broader utilities (XLU) (IDU).
NextEra Energy Beats Earnings Estimates, Misses on Revenue
NextEra Energy (NEE), the biggest utility by market cap, reported its third-quarter earnings results on October 23.
XLU: Analyzing Utilities’ Chart Indicators
Given their recent uptrend, utilities (XLU) have outperformed the broader markets this year.
Returns for Utilities Compared to the Broader Markets
Utilities (XLU) on average have returned 3% this year, while the broader markets have returned 5.5%.
XLU: Where Utility Stocks Might Go from Here
The sell-off in utilities (IDU) last week pulled them below their 50-day moving averages, which indicates a renewed weakness.
What PPL’s Chart Indicators and Short Interest Suggest
Recently, utilities were weak, while benchmark Treasury yields peaked to a seven-year high. Similar weakness was witnessed in PPL stock.
GE’s Second-Quarter Results: No Break from GE Power’s Underplay
The Power segment’s revenues declined 19% in the second quarter to $7.5 billion from $9.4 billion in the same period in 2017.
How Utilities Have Performed Compared to Other Sectors This Year
Let’s take a look at the utility sector’s total returns compared to those of other sectors so far this year.
Utility Stocks Fell, Treasury Yields Rose on September 19
The utilities sector fell more than 2% after the benchmark Treasury yields reached four-month high on September 19.
Where PPL Stock Might Go from Its Current Levels
Recently, PPL (PPL) stock has shown a solid uptrend. The stock gained more than 15% in the last three months.
Southern Company’s Chart Indicators and Short Interest
Southern Company (SO), one of the largest regulated utilities, continues to trade weak despite the recent strength in utilities at large.
Xcel Energy’s Dividend Outlook, Total Returns, and More
In terms of total returns, Xcel Energy returned 2.0%, mirroring the returns of utilities at large.
Comparing Utility Stocks with Treasury Yields
The ten-year Treasury yield peaked at 3.13% in May and currently trades at ~2.9%.
What PPL’s Latest Chart Indicators and Short Interest Suggest
PPL reported better-than-expected earnings in the second quarter. The company’s earnings grew 6% compared to the same period last year.
Comparing Utilities’ Total Returns with Broader Markets
The Utilities Select Sector SPDR ETF (XLU) has returned nearly 5% YTD (year-to-date), while broader markets have returned 8% during the same period.
Who Bought and Who Dumped XLU in Q2 2018?
According to the latest 13F filing, Goldman Sachs and UBS Financial Services increased their stakes in the Utilities Select Sector SPDR ETF (XLU) in Q2.
Are Institutional Investors Positive on Entergy?
According to its latest 13F filing, the Vanguard Group increased its stake in Entergy Corporation (ETR) to 11.9% on June 30.
How Institutional Investors Played Out AES in Q2
Fidelity Management sold net ~2.0 million shares of AES in the second quarter, which lowered its total stake to 6.7%.
How Institutional Investors Played Duke Energy in Q2 2018
In the second quarter, the Vanguard Group was the largest institutional investor in the country’s biggest regulated utility, Duke Energy (DUK).
Who Added Big Positions in NextEra Energy in Q2 2018?
The Vanguard Group is the largest institutional investor in renewables titan NextEra Energy (NEE).
How Institutional Investors Played XLU in Q2 2018
So far this year, the Utilities Select Sector SPDR ETF (XLU) has had a tepid run. XLU is up ~2%, underperforming the broader markets.
Utility Stocks Could Continue to Recover
The short interest in XLU decreased 15% on July 31. On July 13, the total shorted shares in XLU were 67.9 million. They fell to 57.8 million on July 31.
Utilities: What If Jamie Dimon’s Forecast Comes True?
Last week, Jamie Dimon said that investors should be prepared to deal with ten-year Treasury yields reaching 5% or higher.
Why Southern Company Stock Fell 4.5% after Q2 Results
Southern Company (SO) stock tumbled 4.5% after the utility reported its second-quarter earnings on August 8.
Plant Vogtle Dents Southern Company’s Q2 2018 Earnings
Southern Company (SO) reported its second-quarter financial results today. The company reported EPS of -$0.15 for the quarter.
What Do PPL’s Chart Indicators Suggest?
Currently, PPL stock is trading 3% above its 50-day moving average and 4% below its 200-day moving average level.
Analyzing PPL’s Second-Quarter Earnings and Growth Outlook
PPL (PPL) beat the consensus estimates and reported an adjusted EPS of $0.55 for the quarter ending on June 30, which is ~6% growth YoY.
PPL Beat Its Second-Quarter Revenue Estimates
PPL (PPL) reported its second-quarter financial results on August 7. The company reported total revenues of $1.85 billion for the quarter ending on June 30.
Dominion Energy Beats Earnings Estimates but Sees Stock Fall
Dominion Energy (D) released its second-quarter results yesterday. It reported adjusted EPS of $0.86, beating analysts’ estimate and marking a 28% rise YoY (year-over-year) from $0.67.
Can PPL Report Higher Q2 2018 Earnings?
PPL Corporation (PPL) is scheduled to report its second-quarter financial results on August 7. It’s expected to report EPS of $0.54.
NRG Energy’s Revenue Grows, EPS Fall in Q2 2018
NRG Energy (NRG), which saw the largest stock rally among utilities last year, reported its second-quarter financial results today.
Duke Energy’s Q2 2018 Profit Sinks as Expenses Rise
Duke Energy (DUK), the second largest utility by market cap, reported its second-quarter earnings results on August 2.
Southern Company Could Beat the Q2 2018 Revenue Estimates
Southern Company is scheduled to release its Q2 2018 financial results on August 8. The company is expected to report total revenues of $5.30 billion.
FirstEnergy Reported Higher Q2 2018 Earnings Due to the Weather
FirstEnergy reported its second-quarter financial results on July 31 after the markets closed. The company reported an adjusted EPS of $0.62.
What PG&E’s Chart Indicators and Short Interest Imply
PG&E (PCG) stock is currently trading close to its early 2018 levels, marginally underperforming the broader utilities.
How AES Stock Is Placed after a Steep Rally
AES (AES), one of the most rallied stocks among the S&P 500 utilities this year, has soared more than 23% year-to-date.
Could FirstEnergy Report Higher Earnings in Q2 2018?
FirstEnergy (FE) is scheduled to report its second-quarter financial results on August 1. It’s expected to report EPS of $0.52.
American Electric Power: Dividend Outlook, Returns, and More
AEP management plans to invest ~$18 billion in capital projects through 2020. More than two-thirds of its earnings are from regulated operations.
Here’s a Look at Dominion Energy’s Quarterly Revenue Trends
Dominion Energy, the fourth-largest utility in the country by market cap, will release its second-quarter financial results on August 1.
Will Duke Energy Report Higher Second-Quarter Revenues?
Duke Energy (DUK), the second-largest utility by market capitalization, is scheduled to report its second-quarter financial results on August 2.
Here’s What Could Drive Xcel Energy’s Q2 2018 Earnings
Xcel Energy (XEL) is set to report its Q2 2018 results on July 26. Analysts expect EPS of $0.47 compared to $0.45 in 2Q 2017.
Could NextEra Energy Beat Analysts’ Earnings Estimates?
Analysts expect Florida-based NextEra Energy (NEE) to report EPS of $2.04 for the second quarter. In the second quarter of 2017, it reported EPS of $1.86.
Not All Utilities Have a Dim Outlook: Here Are the Best Four
Trade war fears could intensify, which could make markets defensive and result in gains for utilities.
Southern Company’s Total Returns in the Last Five Years
Southern Company (SO) expects to increase its EPS by 4%–6% annually for the next few years, which is in line with the industry average.
Where PPL Stock Might Go from Here
PPL Corporation (PPL) stock has rallied more than 11% in the last month, outperforming utilities at large.
Wall Street Analysts’ Top Five Favorite S&P 500 Utilities Stocks
Utility stocks remained strong even after the Fed delivered a rate hike last month—the second rate hike in 2018.
What Could Drive Duke Energy’s Dividends
Duke Energy’s (DUK) earnings in the longer term seem well placed, which might enable the targeted 4%–6% dividend growth in the next few years.
Southern Company’s Latest Moving Averages and Short Interest
Southern Company (SO), one of the top-yielding utilities in the sector, has risen more than 10% in the last three weeks.
Analyzing AES’s Chart Indicators and Short Interest
AES hit a new 52-week high of $13.56 on June 28. AES has risen more than 24%, while broader utilities (XLU) (IDU) are marginally up year-to-date.
Comparing Utilities’ and Broader Markets’ Returns This Year
In this part, we’ll look at broader markets’ and sectors’ returns so far this year, considering stock appreciation and dividends.
How PPL’s Dividend Yield Stands against Its Peers
PPL Corporation (PPL) is currently trading at a dividend yield of 5.7%, one of the highest in the sector.
Do You Own Any of These Top-Yielding S&P 500 Utilities Stocks?
So far, the slow-moving utilities sector hasn’t performed well this year due to rising interest rates.
Could FirstEnergy Stock Continue to Soar?
US utility stocks (XLU) (IDU) are stealing the focus as investors shift to defensive measures amid market uncertainty.
SCANA Cut Dividends 80%, Stock Rose 5%
For the second quarter, SCANA will pay a dividend of $0.124 per share to shareholders of record on July 10.
What NRG Energy’s Chart Indicators Suggest
While utilities continue to beat the markets amid trade war fears, leading merchant power player NRG Energy has been on a downtrend recently.
How Capacity Utilization across US Industries Trended in May
The total industry capacity utilization in May has fallen from the upward revised April reading of 78.1 to 77.9 in May.
Analyzing Utilities’ Chart Indicators and Short Interest
Currently, the Utilities Select Sector SPDR ETF (XLU) is trading on par with its 50-day moving average and 3% lower than its 200-day moving average.
How Analysts Currently Rate Dominion Energy Stock
Based on analysts’ 12-month mean target price of $72.10, Dominion Energy (D) stock has an upside of ~12% to its current market price of $64.