Vanguard Utilities ETF
How Edison International Stock Looks after Its Q1 Earnings
Edison International (EIX) stock fell more than 5% on May 1 due to its weak first-quarter earnings.
How PG&E Stock Fared Last Week
PG&E (PCG) stock fell the most among utilities last week, by more than 9%.
Why Sempra Energy Looks Strong Ahead
Sempra Energy intends to invest ~$25 billion for the next five years, which is expected to grow its rate base ~9% compounded annually through 2023.
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.
Utility Stocks: What Do the Chart Indicators Suggest?
The Utilities Select Sector SPDR ETF (XLU) is trading at $58.1, which is almost 2% and 7% above its 50-day and 200-day moving average levels.
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.
Have Utility Stocks Started to Look Exhausted?
While broader markets continued to gain as the US-China trade talks resumed, utility stocks fell more than 1% on March 28.
XLU: How Utilities Fared against Broader Markets Recently
Utilities notably outperformed broader markets over the past 12 months.
FirstEnergy’s Chart Indicators and Short Interest
FirstEnergy is trading at $40.4, which is ~4% and 8% above its 50-day and 200-day moving average levels, respectively.
Public Service Enterprise Group: Analysts’ Views and Estimates
Public Service Enterprise Group (PEG) stock returned 5% last year, largely mirroring broader utilities.
Comparing Utilities and Treasury Yields
The benchmark ten-year Treasury yield trended lower and changed from 2.68% to 2.66% last week.
XLU: What to Expect from Utilities in 2019
Currently, XLU is trading at $52.8, which is ~3% below its 50-day moving average levels.
What FirstEnergy’s Chart Indicators Suggest
Utilities have been following a downtrend recently, plummeting more than 10% since early last week.
Do You Own Analysts’ Favorite Utility Stocks?
Utilities witnessed an even harsher fall amid broader markets’ sell-off. However, utilities outperformed the S&P 500 in 2018.
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 Fell from ‘Overbought’ to ‘Oversold’ Last Week
The recent weakness in XLU has pushed it below its 50-day simple moving average level, which might concern investors.
Here Are the S&P 500 Utility Stocks with the Best Dividends
Slow and stable utility stocks have outperformed broader markets so far this year.
XLU and PCG: Analyzing Utility Stocks’ Chart Indicators
Utility stocks continued to trade strong. XLU is trading at $54.88—more than 2% and 6% above its 50-day and 200-day moving average levels.
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.
Utilities’ Returns Compared to Other Sectors in 2018
Utilities (XLU) have returned more than 5% and have outperformed broader markets in 2018.
What’s the Dividend Outlook for These Top-Yielding Utilities?
Earnings and dividend growth for PPL (PPL) for the next few years looks achievable considering its expected rate base growth.
Are Institutional Investors Bullish on Southern Company?
BlackRock sold net ~1.4 million shares of Southern Company (SO) in the second quarter.
How Duke Energy’s Dividend Yield Fares against Its Peers
Duke Energy (DUK), the second-largest utility by market capitalization, has paid dividends to its shareholders for 368 consecutive quarters.
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.
Trends in Capacity Utilization across US Industries in April
According to the Fed’s industrial production and capacity utilization report, capacity utilization increased from 77.6% in March to 78% in April.
Institutional Investors: How They Played S&P 500 Utilities in Q1
Utility stocks—generally called widow and orphan stocks—are one of the poorest performing sectors of the broader markets so far this year.
What to Expect from Consolidated Edison
Consolidated Edison has a mean target price of $77.88—compared to its current market price of $75.43, which implies a potential upside of more than 3%.
NextEra Energy Beat 1Q18 Earnings Estimates
NextEra Energy (NEE), the biggest utility by market capitalization in the country, reported its1Q18 earnings on April 24.
What March Capacity Utilization Data Says about Economy
The total industry capacity utilization in March increased from 77.7% in February to 78.0% in February.
Why Rising Treasury Yields Could Be Bad News for Utility Stocks
The ten-year Treasury yield has risen significantly this year and peaked at 3.0% last week, its highest level in the last four years.
CenterPoint Energy to Buy Vectren in $6 Billion Deal
On April 23, Houston-based CenterPoint Energy (CNP) announced it would buy natural gas company Vectren (VVC) for $6.0 billion.
What PPL’s Current Valuation Means for the Stock
PPL Corporation (PPL) stock was particularly hit by the recent utilities turmoil. Its valuation fell significantly over the last few months.
XLU: How Interest Rates Affect Utilities
The ten-year Treasury yield witnessed a notable drop late last week due to the trade clashes between China and the United States.
February’s Capacity Utilization Trends across US Industries
According to the Federal Reserve, total industry capacity utilization increased 1.3% from 77.4% in January 2018 to 78.1% in February.
How FirstEnergy Stock Ranks against Peers
FirstEnergy (FE) has been one of the top-performing stocks among the S&P 500 Utilities Index (XLU) this year.
NextEra Energy’s Dividend Outlook and Growth Prospects
In the last one-year period, NEE’s total returns came in at 27.0%.
Institutional Investment in XLU during 4Q17
UBS Financial Services is the biggest institutional investor in XLU. UBS held 11.66 million shares of XLU as of December 31, 2017.
How Treasury Yields Weighed on Utilities
US utilities were trading at a dividend yield premium of ~180 basis points–200 basis points to benchmark Treasury yields during mid-2017.
What Could Drive Duke Energy’s 4Q17 Revenues?
Duke Energy (DUK), the second-largest utility by market capitalization, will report its 4Q17 and fiscal 2017 earnings on February 20, 2018.
PG&E’s Recent Implied Volatility Trends
PG&E has witnessed immense volatility in the last few months. On February 9, the implied volatility was ~40%—higher than its 15-day average.
Are Utilities Trading at a Fair Valuation?
Currently, US utilities are trading at an EV-to-EBITDA valuation multiple of 10.4x—compared to their five-year valuation average of ~9x.
S&P 500 Utilities at a 52-Week Low Offer a Big Gain Potential
US utilities have been trading weak for the last few months. The Utilities Select Sector SPDR ETF (XLU) hit its 52-week low of $47.37 on February 6, 2018.
Analyzing Dominion Energy’s Moving Averages
Dominion Energy (D) stock is currently trading 6% and 5% lower than its 50-day and 200-day moving average levels, respectively.
XLU: Analyzing Utilities’ Chart Indicators
On January 26, 2018, the Utilities Select Sector SPDR ETF (XLU) was trading 4% and 5% below its 50-day and 200-day moving average levels.
What Drove NextEra Energy’s 4Q17 Revenues?
NextEra Energy (NEE) reported its 4Q17 financial results on January 26, 2018. NextEra Energy reported total operating revenues of $4.01 billion for 4Q17.
Vectren’s Stable Dividends over the Years
Vectren Corporation (VVC) is a $5 billion diversified utility in Indiana. It’s currently trading at a dividend yield of 2.9% and has increased dividends for the past 58 consecutive years.
Capacity Utilization Trends across US Industries in December
Capacity utilization and the US economy Among the key macroeconomic indicators published by the Federal Reserve, US industries’ capacity utilization is particularly important for understanding the health of each industry. Changes to this indicator can help forecast any changes to the business cycle, product demand, and workforce demand. Increasing levels of capacity utilization could translate to a higher number […]
How Does Southern Company’s Dividend Profile Look?
Georgia-based Southern Company (SO) currently offers a dividend yield of 5.2%, the highest among top SPX utilities.
How Are Utilities’ Dividend Yields and Valuations Trending?
Utilities’ dividend yields have started looking even more attractive after their recent fall.
Does Southern Company Stock Have an Attractive Valuation?
Southern Company (SO), the second largest rate-regulated utility, is currently trading at an EV-to-EBITDA multiple of 10.5x.
Crude Oil Futures Continued to Rally, Wall Street Fell
February WTI crude oil futures contracts also rose 1% to $63.57 per barrel on January 10, 2018. It’s the highest settlement since December 2014.
Is Sempra Energy the Smart Pick of 2018?
California-based Sempra Energy (SRE) has emerged as the largest utility by market cap in the state after PG&E Corporation’s (PCG) wildfire fiasco.
Will Crude Oil Futures and S&P 500 Move in the Same Direction?
February US crude oil (UWT) (USL) futures contracts rose 0.5% to $61.73 per barrel on January 8. Prices are near the highest level since December 2014.
Crude Oil Futures and Wall Street Extends the Rally
US crude oil futures contracts for February delivery also rose 0.6% to $62.01 per barrel on January 4, 2018—the highest settlement since December 2014.
What’s Next for SCANA Corporation Stock?
Cayce, South Carolina–based SCANA Corporation (SCG) abandoned its V.C. Summer Nuclear Station in July 2017 after the project’s cost swelled beyond $20 billion.
A Look at Capacity Utilization across US Industries in November
In the November capacity utilization report, the manufacturing sector remained strong with 76.4% capacity utilization, the highest level since May 2008.
A Look at Dominion Energy’s Earnings Trends
Dominion Energy’s (D) earnings were notably stable in the last few years and experienced earnings growth above the industry average.
How Is Dominion Energy’s Revenue Growth Faring?
US utilities have been experiencing flat electricity demand growth for the last several years, driven by increasing energy efficiency initiatives.
Reading the Trends in Capacity Utilization across US Industries in October
Among the key macroeconomic indicators published by the Fed, capacity utilization in US industries helps investors forecast business cycle changes.
NextEra Energy’s Expected Dividend Growth and Payout Ratio
NextEra Energy’s (NEE) outstanding dividend growth in the last few years contributed to its total returns.
AES Stock Continues to Fall: What Investors Can Expect
While broader utilities are climbing towards a new high, AES (AES) stock continues to fall. It hit a new 52-week low of $10.31 on November 7, 2017.
XLU: How US Utilities Are Currently Valued
So far, US utilities have had a decent run this year. The Utilities Select Sector SPDR ETF (XLU) has risen more than 14%.
Treasury Yields Fell Last Week: Positive for Utilities
Utility stocks generally trade inversely to Treasury yields. The ten-year Treasury yield fell from 2.37% to 2.33% last week.
Will NRG Energy’s Transformation Plan Lead to Growth?
According to Wall Street analysts, NRG Energy (NRG) stock has a mean price target of $30.89 against its current market price of $25.97, which indicates a potential upside of 19% going forward.
Why NRG Energy Missed 3Q17 Earnings Estimates
Princeton-based NRG Energy (NRG) reported its third quarter financial results on November 2, 2017.
Don’t Be Deceived by SCANA’s 5.3% Dividend Yield
SCANA (SCG) is now the highest-yielding S&P 500 Utility stock with a dividend yield of 5.34%. But the yield has increased due to its stock’s recent fall.
This Could Keep Driving SCANA Stock Lower
According to the Wall Street analyst estimates, SCANA (SCG) has a mean price target of $52.17, implying an estimated gain of 21% over the next year.
NextEra Energy’s Chart Indicators and Short Interest
NextEra Energy (NEE) stock continues to trade above its key moving average levels, which highlights the strength of the stock.
What Will Drive Duke Energy’s 3Q17 Earnings?
The biggest rate-regulated utility-holding company in the country, Duke Energy (DUK), is slated to report its third-quarter financial results on November 3.
Why AEP’s Payout Ratio Is Concerning Investors
American Electric Power (AEP) has a solid dividend payment history.
Understanding Dominion’s Price Targets ahead of Its 3Q17 Results
Among the 17 analysts tracking Dominion, 13 recommend the stock as a “hold,” while two recommend a “strong buy,” and two recommend a “buy.
Why SCANA Is Selling Its Claims against Toshiba
Baupost Group has purchased the largest chunk of the $2.2-billion claim that SCANA (SCG) and Santee Cooper had against Toshiba related to Westinghouse.
How Eversource Energy Managed Higher Dividend Growth
In the past five years, Eversource Energy has raised its per-share dividend by 10.1%, compounded annually.
Sempra Energy’s Current Valuation and Dividend Profile
Sempra Energy (SRE) stock appears to be trading at a fair premium. On October 31, 2017, it was trading at an EV-to-EBITDA valuation multiple of 15.4x.
NEE, SO, DUK, D: Where Top SPX Utility Stocks Might Go
According to Wall Street analysts’ consensus, NextEra Energy (NEE) has an estimated gain of ~6%—compared to its mean target price of $155.57.
XLU: Discussing Utilities’ Concerning Valuation
The Utilities Select Sector SPDR ETF (XLU) trades at a dividend yield of 3.5%—significantly higher than the broader markets’ yield of 2%.
What a Recent Correction in Xcel Energy Stock Could Mean
Investors took shelter in relatively safer utility stocks during the market turmoil this year. Xcel Energy is one of the relatively safer utility stocks.
What Do Analysts Expect from Southern Company Stock?
Analysts have given Southern Company (SO) stock a mean price target of $51.53, compared with its current market price of $49.87.
What Drove Southern Company’s Recent Rally?
Southern Company (SO) is now trading at an EV-to-EBITDA multiple of 11.3x. Its five-year average historical EV-to-EBITDA valuation multiple is 11.0x.
SO, NEE, and DUK: Looking at Top Utilities’ Price Targets
Let’s have a look at the price targets for top utilities in this part of our series. According to Wall Street analyst consensus, Southern Company (SO) stock has a price target of $51.47.
How US Utility Stocks Beat Broader Markets this Year
The Utilities Select Sector SPDR ETF (XLU) declared a quarterly dividend of $0.42 per unit on September 15. The record date for the dividend is September 18.
Utility Stocks and Treasury Yields: A Key September Comparison
The ten-year Treasury yield fell from a high of 2.28% to 2.16% in August 2017.
Earnings Growth Is Key to NextEra Energy’s Outperformance
At $71.0 billion of market capitalization, NextEra Energy (NEE) is the largest utility among US utilities.
Why NextEra Energy Could Continue to Outperform Peers
Investor unease, a slower-than-expected pace of interest rate hikes, and superior yield have pushed up US utility stocks so far this year.
Will the S&P 500 Index Recover from Last Week’s Fall?
The S&P 500 Index (SPY) closed last week at 2425.55, losing 0.65% as compared to its August 11 close.
A Glance at the Progress of the Paris Agreement
Although the United States was part of the Paris Agreement during the Obama administration, participation could be doubtful under the Trump administration.
Higher Electricity Consumption Will Likely Help US Utilities
Total electricity consumption in 2016 was 1.2% lower than in 2015. Higher consumption in 4Q16 might have a positive impact on utilities’ earnings.
What Are US Electricity Consumption Forecasts for 2017?
According to estimates, the average residential customer will consume 3% more electricity between December 2016 to March 2017 compared to the same period last year.
A Look at US Electricity Prices and the Factors Impacting Them
According to the EIA, residential customers paid 0.7%, or 12.4 cents, less per kilowatt-hour in the first half of 2016 than in 1H15.
Why Water Utilities Yield Nearly Half What Electric Utilities Do
Water utilities are now yielding nearly 2%—roughly half the current yield of electric utilities.
Many Sectors Want to See a Rate Hike, but Utilities, Not So Much
The expected rise in US interest rates later this year may dent the profitability of utilities (VPU), given their high outflows toward debt servicing.
A Look at the Fund Flows in Low-Volatility ETF SPLV
The anticipated views of the Federal Reserve members are expected to make way for utilities (IDU) (VPU) and for low-volatility funds.
Analyzing CMS Energy’s Free Cash Flow Growth
In the past five years, CMS Energy has experienced flat or diminishing growth in its cash flow from operations, while its capital expenditure has significantly increased.
A Look at How Funds Are Flowing into and out of VPU
Since July 2016, VPU has experienced net outflows of nearly $320 million.
VPU Versus XLU: Which Utility ETF Is Better?
Utility ETFs have performed well in the last one year. The Vanguard Utilities Fund ETF (VPU) has been no exception to this.
What Are Institutions Doing with Their Holdings in VPU?
Since July 2016, VPU’s number of buyers rose by a robust ~8%, while its number of sellers also rose by 24%.
What We Learned by Analyzing VPU’s Portfolio Structure
In VPU, the top ten holdings form nearly 50% of the total portfolio. These holdings include NextEra Energy (NEE), Duke Energy (DUK), and Southern Company (SO).
Why Buy Water Utilities When Electric Utilities Are Yielding Double?
Investors have been preferring water utilities for the past few quarters due to their relatively higher dividend yields and stable stock price movements.
Can AES Stock Continue Its Momentum?
AES (AES) has rallied more than 30% since the beginning of 2016. No other US competitive utility holding company has soared that much in the same period.
NRG and Other Merchant Power Players Offer Enticing Upsides
According to Wall Street analyst estimates, NRG Energy (NRG) has an estimated upside of 39% in one year with a price target of $17.86.