XLU - Utilities Select Sector SPDR ETF

NYSEArca - NYSEArca Delayed Price. Currency in USD
52.67
+0.64 (+1.23%)
At close: 4:00PM EST

52.67 0.00 (0.00%)
After hours: 5:13PM EST

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Previous Close52.03
Open51.81
Bid0.00 x 29200
Ask52.03 x 800
Day's Range51.76 - 52.96
52 Week Range47.37 - 57.18
Volume27,092,614
Avg. Volume21,979,179
Net Assets8.58B
NAV52.92
PE Ratio (TTM)8.68
Yield3.33%
YTD Return3.95%
Beta (3Y Monthly)0.16
Expense Ratio (net)0.13%
Inception Date1998-12-16
Trade prices are not sourced from all markets
  • Top Utilities: Analysts’ Views and Target Prices
    Market Realist9 hours ago

    Top Utilities: Analysts’ Views and Target Prices

    Utilities: Analyzing Gains and Losses Last Week(Continued from Prior Part)Analysts’ target pricesAnalysts expect an upside potential of 6.3% from NextEra Energy (NEE) stock based on the median target price of $186.8 and its current price of

  • How Low Could PG&E’s Bankruptcy Push Its Stock?
    Market Realist10 hours ago

    How Low Could PG&E’s Bankruptcy Push Its Stock?

    How Low Could PG&E’s Bankruptcy Push Its Stock?PG&E prepares for bankruptcy  PG&E (PCG) shares fell more than 50% on January 14. The company said that it’s preparing to file for Chapter 11 bankruptcy. The utility is facing

  • Utilities: Top Gainers in 2018
    Market Realist11 hours ago

    Utilities: Top Gainers in 2018

    Utilities: Analyzing Gains and Losses Last Week(Continued from Prior Part)Top gainers in 2018 On average, utilities rose 2% in 2018. Including dividends, they returned more than 5%, while broader markets lost 6% in 2018. NRG Energy (NRG) and AES

  • Xcel Energy and Consolidated Edison: Analysts’ Views
    Market Realist11 hours ago

    Xcel Energy and Consolidated Edison: Analysts’ Views

    Xcel Energy versus Consolidated Edison in 2019(Continued from Prior Part)Analysts’ target pricesAnalysts’ median target price of $51.4 for Xcel Energy (XEL) implies an estimated upside of more than 4% compared to its current market price of

  • Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?
    Zacks12 hours ago

    Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?

    Sector ETF report for FUTY

  • Dividend Yields: Analyzing Top Utility Stocks
    Market Realistyesterday

    Dividend Yields: Analyzing Top Utility Stocks

    Utilities: Analyzing Gains and Losses Last Week(Continued from Prior Part)Dividend yieldsMacroeconomic factors mainly drove broader markets in the last few months, which played out well for utilities. Utilities’ relatively slow and steady stock

  • ETF Trendsyesterday

    PG&E’s Bankruptcy Filing Drags on Utilities ETFs

    Utilities sector exchange traded funds were among the worst performers Monday after PG&E (PCG) prepares its bankruptcy filing in response to the devastating liabilities incurred during the widespread wildfires across California. On Monday, the Invesco S&P 500 Equal Weight Utilities ETF (RYU) fell 3.0%, First Trust Utilities AlphaDEX Fund (FXU) dropped 2.7% and Utilities Select Sector SPDR (XLU) decreased 2.4%, with the utilities sector-related ETFs briefly testing their long-term support at the 200-day simple moving average. PG&E said it is preparing to file for Chapter 11 bankruptcy for all its businesses due to the liabilities linked to the wildfires in 2017 and 2018, Reuters reports.

  • XLU: What to Expect from Utility Stocks
    Market Realistyesterday

    XLU: What to Expect from Utility Stocks

    Utilities: Analyzing Gains and Losses Last Week(Continued from Prior Part)Moving averages The Utilities Select Sector SPDR ETF (XLU) is trading at $53.2, which is almost 2% below its 50-day and 1% above its 200-day simple moving average level. The

  • Goldman Sachs: Investors Should Get Defensive in 2019
    Market Realistyesterday

    Goldman Sachs: Investors Should Get Defensive in 2019

    Bulls versus Bears: Who Will Rule the Stock Markets in 2019?(Continued from Prior Part)Goldman Sachs’ S&P 500 target As of December 14, Goldman Sachs’ (GS) chief equity strategist, David Kostin, expects the S&P 500 (SPY) to reach 3,000 by

  • PG&E Investors’ Nightmare Continues as the Stock Tanks Over 50%
    Market Realistyesterday

    PG&E Investors’ Nightmare Continues as the Stock Tanks Over 50%

    PG&E Investors’ Nightmare Continues as the Stock Tanks Over 50%PG&E Corporation (PCG)Today, the nightmare for the US energy company PG&E Corporation’s (PCG) investors seems to be continuing as the stock fell 50.1% today to a daily low of $8.77. After tanking 48.4% in the fourth quarter of 2018, the stock had already lost about

  • Bankruptcy Fears Take Charge: PG&E Stock Fell 30% Last Week
    Market Realistyesterday

    Bankruptcy Fears Take Charge: PG&E Stock Fell 30% Last Week

    Utilities: Analyzing Gains and Losses Last Week (Continued from Prior Part) ## PG&E PG&E (PCG) shares continued to dig deeper last week. The big fall in PG&E stock, driven by bankruptcy fears, got worse after a flurry of rating downgrades last week. Moody’s and S&P Global Ratings downgraded PG&E to “junk” last week citing potential liabilities related to wildfires and regulatory pressures, based on Reuters reports. PG&E has lost more than 60% in the last two months—almost $15 billion of its market cap. ## Hard times ahead PG&E is facing a multi-billion dollar liability related to wildfires in 2017 and 2018. Bankruptcy isn’t clear yet. In November, the utility reported that its existing insurance wouldn’t be enough to cover the liabilities. The wildfire-related liabilities could have a material impact on the company’s financial condition. The wildfire called “Camp Fire” started on November 8. Camp Fire, the deadliest wildfire in California’s history, killed at least 86 people. PG&E was held responsible for starting wildfires in 2017. In 2018, PG&E reported more than $2 billion in charges related with the wildfires in 2017. ## Stock update PG&E stock continues to look weak. The large discount to PG&E’s 50-day and 200-day moving average levels highlights substantial weakness in the stock. The stock has been trading in the “oversold” zone for a while now with its relative strength index at 17. PG&E’s implied volatility touched 118% last week. The implied volatility shows investors’ anxiety. An increase in the volatility is usually related to a fall in stock prices. In comparison, utilities (XLU) at large witnessed an implied volatility of 16%, while the S&P 500’s implied volatility was 15%. Continue to Next Part Browse this series on Market Realist: * Part 1 - Utilities: Analyzing Gains and Losses Last Week * Part 3 - XLU: What to Expect from Utility Stocks * Part 4 - Dividend Yields: Analyzing Top Utility Stocks

  • Utilities: Analyzing Gains and Losses Last Week
    Market Realistyesterday

    Utilities: Analyzing Gains and Losses Last Week

    Utilities: Analyzing Gains and Losses Last Week ## Will the defensives repeat 2018? Utilities continued to underperform broader markets last week. The Utilities Select Sector SPDR ETF (XLU) rose almost 1%, while the S&P 500 rose 2.5% in the week ending January 11. Utilities beat the S&P 500 by a wide margin in 2018 particularly when markets started falling in the fourth quarter. The benchmark ten-year Treasury yield was largely flat last week—it closed at 2.70%. Utility stocks and Treasury yields usually trade inversely to each other. Higher interest rates could make utilities less appealing compared to bonds. The Fed delivered four quarter-point rate hikes last year—the most hikes since it started rate normalization in 2015. ## Movers and shakers NextEra Energy (NEE), the biggest utility by market cap, stock rose ~2%, while Duke Energy (DUK) fell almost 1% last week. Regulated utility giant Southern Company (SO) grew more than 4%, while Dominion Energy (D) fell more than 3%. PG&E (PCG) stock fell 30% last week due to bankruptcy concerns. On January 13, PG&E reported that CEO Geisha Williams resigned. We’ll discuss PG&E more in the next part of this series. Merchant power stock NRG Energy (NRG) rose more than 3% last week. NRG Energy was the top-rallied stock in 2018 among utilities. The stock rose almost 37% in 2018. Read Will NRG Energy Stock Continue to Increase in 2019? to learn more. Competitive utility Exelon (EXC) rose 2.6%, while FirstEnergy (FE) rose 3.2% last week. So far in 2019, utilities at large have risen ~0.6%, while S&P 500 has risen almost 4%. Continue to Next Part Browse this series on Market Realist: * Part 2 - Bankruptcy Fears Take Charge: PG&E Stock Fell 30% Last Week * Part 3 - XLU: What to Expect from Utility Stocks * Part 4 - Dividend Yields: Analyzing Top Utility Stocks

  • Comparing Utilities and Broader Markets’ Volatility
    Market Realistyesterday

    Comparing Utilities and Broader Markets’ Volatility

    Xcel Energy versus Consolidated Edison in 2019 (Continued from Prior Part) ## Implied volatility Xcel Energy (XEL) and Consolidated Edison (ED) are some of the stable stocks among their peers. On January 10, both of the stocks had implied volatility levels close to 20%, which is lower than their respective 15-day volatilities. The Utilities Select Sector SPDR ETF (XLU) had an implied volatility of 17%. The implied volatility represents investors’ unease. Rising volatility is usually related to falling stock prices. Broader markets witnessed increased volatility in the last few months. Usually, broader markets’ implied volatility levels are lower than utilities at large. Recently, the S&P 500 had an implied volatility of 17%. Recently, the implied volatility of top utilities including Southern Company (SO) and Duke Energy (DUK) was close to 18%. To learn about broader utilities’ (XLU) chart indicators and where they might go in the near term, read XLU: What to Expect from Utilities in 2019. Next, we’ll discuss Xcel Energy and Consolidated Edison’s target prices. Continue to Next Part Browse this series on Market Realist: * Part 1 - Xcel Energy versus Consolidated Edison in 2019 * Part 2 - Xcel Energy’s Total Returns Outperformed Its Peers * Part 3 - Xcel Energy and Consolidated Edison’s Dividend Profiles

  • Analyzing Xcel Energy and Consolidated Edison’s Valuation
    Market Realistyesterday

    Analyzing Xcel Energy and Consolidated Edison’s Valuation

    Xcel Energy versus Consolidated Edison in 2019 (Continued from Prior Part) ## Valuation Xcel Energy (XEL) and Consolidated Edison (ED) stocks fell more than 10% late last month. The stocks mirrored weakness in the overall utilities space. Xcel Energy is trading at a forward PE ratio of 18x based on analysts’ estimated EPS in 2019. Xcel Energy’s average historical valuation is close to 18x, while utilities at large are valued around 17x. Xcel Energy stock seems to be trading at a marginal premium compared to its five-year historical average and peers’ average. Analysts expect Xcel Energy’s EPS growth to be above 6%, which is higher than peers’ average EPS growth for 2019. Xcel Energy’s marginally higher premium valuation seems justified. ## Consolidated Edison Consolidated Edison (ED) is trading at a forward PE ratio of 17x, which is close to peers’ average valuation and higher than its own five-year historical average of ~15x. Consolidated Edison stock seems fairly valued compared to its peers. Consolidated Edison seems to be trading at a premium compared to its historical valuation. Analysts expect Consolidated Edison to have flattish EPS growth in 2019. The biggest constituent of the Utilities ETF (XLU), NextEra Energy (NEE) is trading at a forward PE ratio of 21x based on analysts’ estimated EPS for the next 12 months. NextEra Energy looks to be trading at a premium compared to its historical valuation and its peers. Southern Company (SO) stock is valued at a forward PE ratio of 14.5x, while Duke Energy (DUK) is valued at 17x. Continue to Next Part Browse this series on Market Realist: * Part 1 - Xcel Energy versus Consolidated Edison in 2019 * Part 2 - Xcel Energy’s Total Returns Outperformed Its Peers * Part 3 - Xcel Energy and Consolidated Edison’s Dividend Profiles

  • Xcel Energy’s Total Returns Outperformed Its Peers
    Market Realist4 days ago

    Xcel Energy’s Total Returns Outperformed Its Peers

    Xcel Energy versus Consolidated Edison in 2019 (Continued from Prior Part) ## Total returns Xcel Energy (XEL) outperformed Consolidated Edison (ED) in terms of total returns in the last several years. We considered dividends paid in a particular period and capital appreciation to calculate the total returns. In the past year, Xcel Energy returned more than 6%, while Consolidated Edison returned -5%. The Utilities Select Sector SPDR ETF (XLU) returned more than 5% during the same period and beat broader markets. Investors turned to relatively safer utilities late last year amid market turmoil due to their higher dividend yields and stable stock movements. ## Xcel Energy outperformed In the last five years, Consolidated Edison returned 70%, while Xcel Energy returned 107% and outperformed utilities at large. Xcel Energy’s relatively higher earnings growth compared to its peers during this period might have played out well. Consolidated Edison’s dividend yield was higher than Xcel Energy in the last five years. We’ll discuss the two utilities’ dividend profiles in the next part of the series. Utilities (XLU) at large returned 65% in the last five years. NextEra Energy (NEE), the biggest utility by market cap, was the top performer regarding total returns. NextEra Energy’s consistent and above-average earnings growth influenced its stock performance and fueled its superior dividend growth in the last few years. NextEra Energy returned more than 150% in the last term. To learn more, read These S&P 500 Utilities Have Delivered the Best Five-Year Returns. Continue to Next Part Browse this series on Market Realist: * Part 1 - Xcel Energy versus Consolidated Edison in 2019 * Part 3 - Xcel Energy and Consolidated Edison’s Dividend Profiles * Part 4 - Analyzing Xcel Energy and Consolidated Edison’s Valuation

  • Xcel Energy versus Consolidated Edison in 2019
    Market Realist4 days ago

    Xcel Energy versus Consolidated Edison in 2019

    Xcel Energy versus Consolidated Edison in 2019 ## Regulated utilities Mid-sized regulated utilities Consolidated Edison (ED) and Xcel Energy (XEL) operate in different territories, but they have several aspects in common. Both of the utilities are valued at a market cap of ~$25 billion. They generate a large portion of their revenues from regulated operations. Consolidated Edison offers one of the most reliable dividends. The company has increased its dividend for 44 consecutive years. Xcel Energy, with its sturdy stock performance, outperformed utilities at large in the last several years. We’ll analyze Consolidated Edison and Xcel Energy in this series. We’ll see which utility might outperform in the future. ## Market performance Xcel Energy stock had a decent run last year before weakness in the defensives (XLU) pulled it down. The stock rose 3% in 2018. Consolidated Edison stock fell almost 10% in 2018 despite reporting better-than-expected quarterly results last year. The company beat analysts’ earnings and revenue estimates in 2018. For the nine months ending September 30, Consolidated Edison and Xcel Energy reported adjusted EPS growth of more than 7% and 9% YoY. Both utilities’ regulated operations facilitate earnings stability and predictability, which bodes well for stable dividends. Xcel Energy and Consolidated Edison expect their rate bases to grow ~6% compounded annually through 2020, which will likely enable earnings growth around similar levels. The rate base is the value of the property on which the utility is allowed to earn a specific rate of return, according to the rules set by regulators. Continue to Next Part Browse this series on Market Realist: * Part 2 - Xcel Energy’s Total Returns Outperformed Its Peers * Part 3 - Xcel Energy and Consolidated Edison’s Dividend Profiles * Part 4 - Analyzing Xcel Energy and Consolidated Edison’s Valuation

  • NRG Energy Stock: Analysts’ Recommendations
    Market Realist5 days ago

    NRG Energy Stock: Analysts’ Recommendations

    Will NRG Energy Stock Continue to Increase in 2019? (Continued from Prior Part) ## Analysts’ target prices Wall Street analysts have given NRG Energy (NRG) stock a median target price of $44.6, which implies an upside potential of 11.4% from its current price of $40.0 over the next 12 months. Among the ten analysts tracking NRG Energy, four recommended a “strong buy,” five recommended a “buy,” and one recommended a “hold.” None of the analysts recommended a “sell” as of January 8. ## AES’s target price Analysts’ median target price of $16.2 for AES (AES) implies an upside potential of more than 7% compared to its current market price of $15.0 over the next 12 months. Among the ten analysts tracking AES, four recommended a “buy,” five recommended a “hold,” and one recommended a “sell.” ## Bottom line NRG Energy’s attractive valuation and potential earnings growth in 2019 makes it an alluring investment bet. Unlike other utilities, NRG Energy pays trivial dividends. NRG Energy is more volatile than its peers. Investors usually turn to defensive stocks like utilities amid broader market turmoil in search of yields and safe stock movements. Despite being part of the Utilities ETF (XLU), NRG Energy seems to be an exception and a relatively risky bet. To learn about how top utilities are placed ahead and where they might go, read How Top Utility Stocks Are Placed at the Beginning of 2019 Browse this series on Market Realist: * Part 1 - Will NRG Energy Stock Continue to Increase in 2019? * Part 2 - Analyzing NRG Energy’s Chart Indicators * Part 3 - Looking at NRG Energy’s Implied Volatility Trends

  • Looking at NRG Energy’s Implied Volatility Trends
    Market Realist6 days ago

    Looking at NRG Energy’s Implied Volatility Trends

    Will NRG Energy Stock Continue to Increase in 2019? (Continued from Prior Part) ## Implied volatility On January 8, the implied volatility in NRG Energy (NRG) stock was close to 30%—lower than its 15-day average volatility. Recently, the Utilities Select Sector SPDR ETF’s (XLU) implied volatility was 18%. The implied volatility represents investors’ unease. Rising volatility is usually related to falling stock prices. Broader markets witnessed increased volatility in the last few months. Usually, broader markets’ implied volatility levels are lower than utilities at large. NRG Energy is one of the most volatile stocks among utilities. Recently, NextEra Energy (NEE) and Southern Company’s (SO) implied volatility was ~20%. PG&E (PCG) was the most volatile stock in utilities. On January 8, PG&E’s implied volatility was 111%. In November, the wildfires in California changed the company’s fortunes. To learn more, read PG&E Stock Loses ~30% in Two Trading Sessions. Continue to Next Part Browse this series on Market Realist: * Part 1 - Will NRG Energy Stock Continue to Increase in 2019? * Part 2 - Analyzing NRG Energy’s Chart Indicators * Part 4 - NRG Energy Stock: Analysts’ Recommendations

  • Analyzing NRG Energy’s Chart Indicators
    Market Realist6 days ago

    Analyzing NRG Energy’s Chart Indicators

    NRG Energy (NRG) stock is trading at $40.0, which is almost 2% and 15% above its 50-day and 200-day moving average levels, respectively. The premium to both of the simple moving averages indicates strength in the stock. The levels close to $39.0 and $34.9 will likely act as a support for NRG Energy stock in the short term. NRG Energy hasn’t broken below its 200-day moving average level in more than a year.

  • Will NRG Energy Stock Continue to Increase in 2019?
    Market Realist6 days ago

    Will NRG Energy Stock Continue to Increase in 2019?

    Will NRG Energy Stock Continue to Increase in 2019? ## Top gainer in 2018 NRG Energy (NRG) rose more than 75% in 2017 and almost 40% in 2018. NRG Energy, one of the smallest constituents of the Utilities ETF (XLU), has been on a roll for the last few years. The company’s activist investors introduced a transformation plan in 2017. What’s in store for NRG Energy investors in 2019? NRG Energy’s transformation plan focused on streamlining the company’s operations and trimming down the total debt. The company sold non-core businesses like NRG Yield and Renewables in 2018. NRG Energy seems to be on track to meet its cost-saving targets for 2018, which will likely have a positive impact on its earnings in upcoming quarters. Analysts expect NRG Energy to have sturdy income growth in 2019. ## Valuation Currently, NRG Energy stock is trading at a forward PE ratio of 9x based on analysts’ projected EPS for 2019. Utilities at large trade at an average forward PE ratio of 16x–17x. NRG Energy stock appears to have an attractive valuation given its lower forward PE ratio compared to peers’ average. NRG Energy seems to be trading at an attractive valuation considering the company’s higher potential EPS growth in 2019. AES (AES) stock is trading at a forward PE ratio of 11x, which is higher than NRG Energy. AES appears to be trading at a discounted valuation compared to utilities at large and its historical average. AES rose more than 35% last year. In comparison, broader utilities (XLU) rose 3% in 2018. Continue to Next Part Browse this series on Market Realist: * Part 2 - Analyzing NRG Energy’s Chart Indicators * Part 3 - Looking at NRG Energy’s Implied Volatility Trends * Part 4 - NRG Energy Stock: Analysts’ Recommendations

  • NRG, SRE, AWK, and EIX: Utility Stocks with Strong Upside Potential
    Market Realist6 days ago

    NRG, SRE, AWK, and EIX: Utility Stocks with Strong Upside Potential

    In this part, we’ll discuss the utilities that offer a strong upside potential for 2019. Wall Street analysts have given NRG Energy (NRG) a median target price of $44.5, which implies an ~14% upside potential compared to its current price of $39.0. NRG Energy is one of analysts’ favorite utility stocks. Read Do You Own Analysts’ Favorite Utility Stocks? to learn more.

  • PG&E Stock Loses ~30% in Two Trading Sessions
    Market Realist7 days ago

    PG&E Stock Loses ~30% in Two Trading Sessions

    Shares of the wildfire-stricken PG&E Corporation (PCG) are falling lower and lower. According to Reuters, S&P Global Ratings cut PG&E’s ratings from “BBB-“ to “B,” referring to the indications of significant deterioration in the political and regulatory environment for the utility. On January 5, Reuters reported that PG&E is considering filing for bankruptcy.

  • Utility Stocks with the Highest Dividend Growth
    Market Realist7 days ago

    Utility Stocks with the Highest Dividend Growth

    Analyzing Utilities in the Week Ending January 4 (Continued from Prior Part) ## Dividend growth In this part, we’ll discuss the S&P 500 Utilities with the highest dividend growth over the last five years. Utilities at large managed to raise their dividends per share by an average of ~4% in the last five years compounded annually. Competitive utility AES (AES) increased its dividend per share by more than 26% compounded annually during the same period. However, AES has a shorter dividend payment history. The company started paying shareholders in 2012. AES offers a dividend yield of 3.8%, which is higher than utilities’ average of 3.3%. ## NextEra Energy NextEra Energy (NEE), the biggest utility by market cap and the largest component of the Utilities Select Sector SPDR ETF (XLU), increased its dividend 11% in the last five years. NextEra Energy’s superior earnings growth has fueled its above-average dividend growth in the last few years. NextEra Energy yields 2.6%—one of the lowest yields among its peers. Despite a lower yield, NextEra Energy outperformed broader utilities and even broader markets in the last several years. To learn how NextEra Energy achieved this feat, read These S&P 500 Utilities Have Delivered the Best Five-Year Returns. In comparison, leading water utility American Water Works (AWK) has raised its dividend 10%, while California-based Edison International (EIX) reported a higher dividend growth of 12.4% in the last five years. American Water Works is trading at a yield of 2%, while Edison International offers a yield of 4.3%. Continue to Next Part Browse this series on Market Realist: * Part 1 - Utilities: Gains and Losses Last Week * Part 2 - XLU: What to Expect from Utilities in 2019 * Part 3 - Utilities versus Broader Markets’ Total Returns

  • Analyzing FE, XEL, and AEP’s Current Valuation
    Market Realist7 days ago

    Analyzing FE, XEL, and AEP’s Current Valuation

    Analyzing Utilities in the Week Ending January 4 (Continued from Prior Part) ## Valuation FirstEnergy (FE) stock seems to have an attractive valuation. FirstEnergy has a lower valuation multiple than its historical average and peers’ average. FirstEnergy’s forward PE ratio, based on analysts’ 2019 EPS estimate, is 14x. The company’s five-year historical average is ~17x. First Energy’s peers’ average is also close to similar levels. FirstEnergy is among the top-gaining utility (XLU) stocks in 2018. The company’s business mix improved last year. FirstEnergy became an entirely regulated utility. The company’s earnings and dividend profile are expected to stabilize in the coming quarters. ## Are utilities a good bargain? American Electric Power (AEP) stock is trading at a forward PE ratio of 17.7x based on its EPS estimates in 2019. American Electric Power’s five-year historical average valuation is close to 17x. American Electric Power looks to be trading at a premium valuation compared to its peers and its historical average. Xcel Energy (XEL), one of the top regulated utilities, is trading at a forward PE ratio of 18.5x—marginally lower than its five-year historical average. Exelon (EXC) stock has a forward PE ratio of 14x, which is lower than many of its peers’ ratios and its five-year average of ~17x. Exelon reported solid earnings growth in 2018. The stock rallied more than 16% last year. The company’s earnings growth is expected to slow down in 2019 based on the estimates. Read NEE, DUK, SO, and D: How Are Top Utility Stocks Valued in 2019? to learn more. Continue to Next Part Browse this series on Market Realist: * Part 1 - Utilities: Gains and Losses Last Week * Part 2 - XLU: What to Expect from Utilities in 2019 * Part 3 - Utilities versus Broader Markets’ Total Returns

  • Comparing Utilities and Treasury Yields
    Market Realist7 days ago

    Comparing Utilities and Treasury Yields

    Analyzing Utilities in the Week Ending January 4 (Continued from Prior Part) ## Utilities versus Treasury yields The benchmark ten-year Treasury yield trended lower and changed from 2.68% to 2.66% last week. Utility stocks and Treasury yields usually trade inversely to each other. The ten-year Treasury yield crossed 3.2% in November. Utilities fell more than 3% during this period. Utilities outperformed broader markets last year. In 2018, there was the highest number of quarter-point interest rate hikes from the Fed since it started rate normalization in 2015. Higher interest rates dent utilities due to their heavy capital expenditure needs. Utilities (XLU) usually carry large amounts of debt on their books. Higher interest rates increase utilities’ debt-servicing costs, which ultimately damages their profitability. Utility stocks (VPU) (IDU) are usually seen as bond substitutes due to their steady dividend payments. Higher interest rates could make utilities less appealing compared to bonds. So, we usually see investors selling utility stocks and switching to bonds in order to obtain higher yields when rates rise. To learn how the top utility stocks played out recently and how they’re placed for 2019, read How Top Utility Stocks Are Placed at the Beginning of 2019. Continue to Next Part Browse this series on Market Realist: * Part 1 - Utilities: Gains and Losses Last Week * Part 2 - XLU: What to Expect from Utilities in 2019 * Part 3 - Utilities versus Broader Markets’ Total Returns