U.S. equities are rebounding on Wednesday thanks to another positive headline out of the President Donald Trump Administration. Specifically, it sounds like a decision on possible tariffs on auto imports from Europe will be delayed. Ostensibly, this is to clear the way to concentrate on the standoff with China and give the markets enough good news to keep prices stable.
So far, it appears to be working. The Dow Jones Industrial Average is rebounding back above its 200-day moving average, the third day of testing this critical support level, and looks set for a challenge of overhead resistance near the 26,000 level. The tech-heavy Nasdaq Composite looks even better, attempting to climb back above the 50-day moving average thanks to big gains in the likes of Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
But its the income-oriented stocks that are catching my eye as investors pile into defensive names on the expectation that we’ve yet to see the last of this latest bout of volatility. Here are four names to watch:
Utility Stocks to Buy: American Electric Power (AEP)
Shares of American Electric Power (NYSE:AEP) are pushing up and out of a three-month consolidation range as it continues a steady long-term uptrend that goes back to the 2009 bear market low. Two days ago, as the Dow plunged below its 200-day moving average for the first time in months, AEP stock was pushing to a new record high.
Shares carry a 3.1% dividend yield. The company is scheduled to next report results on July 24 before the bell. Analysts are looking for earnings of $1 per share on revenues of $4.1 billion. When the company last reported on April 25, earnings of $1.19 per share beat estimates by eight cents on a 2.5% rise in revenues.
Aqua America (WTR)
Shares of water utility Aqua America (NYSE:WTR) have also been flirting with new highs in recent days, jumping up and over resistance that’s been in play since late 2017. The company, based in Pennsylvania, pays a 2.2% dividend yield. Analysts at Coker Palmer recently defended the name after soft quarterly results, noting it was more about timing discrepancies than softness in the underlying business.
The company is scheduled to next report results on Aug. 1 after the close. Analysts are looking for earnings of 39 cents per share on revenues of $226.9 million. When the company last reported on May 2, earnings of 28 cents per share missed estimates by two cents on a 3.5% rise in revenues.
Consolidated Edison (ED)
Like the other names presented here, Consolidated Edison (NYSE:ED) shares are using the current market volatility to push to new record highs, jumping over resistance from prior highs set in late 2017 as it exits a three-month consolidation range. The stock pays a 3.5% dividend yield. Analysts at Bank of America Merrill Lynch recently upgraded shares to “buy,” and set a $94-a-share price target.
The company will next report results on Aug. 1 after the close. Analysts are looking for earnings of 61 cents per share on revenues of $2.8 billion. When the company last reported on May 2, earnings of $1.39 beat estimates by three cents on $3.4 billion in revenues.
Southern Company (SO)
Shares of power utility Southern Company (NYSE:SO) are also pushing to new highs this week, breaking up and out of a three-month consolidation range. This caps a near-30% rise off of its late December low, breaking free of a sideways channel that went back to 2016. Evercore ISI analysts recently upgraded the stock, which carries a dividend yield of 4.6%.
The company will next report results on Aug. 7 before the bell. Analysts are looking for earnings of 71 cents per share on revenues of $5.1 billion. When the company last reported on May 1, earnings of 70 cents per share missed estimates by two cents on a 15.1% decline in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
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