4 Large-Cap Utilities On A Roll: Can They Climb Higher?
Zacks Investment Research | Jun 26, 2019 09:23PM ET
Amid geopolitical tensions in Iran and an impending global economic slowdown, one sector that is immune to the vagaries of economic cycle is the utility sector. Utilities are relatively protected from large swings in the stock market and are therefore considered a defensive investment, unaffected by economic cycles and politics.
Utility companies enjoy a reputation for safety, given the regulated nature of businesses, which lend their revenues a high level of certainty. These companies also benefit from the domestic orientation of their businesses, which shield them from foreign currency translation issues. Utilities offer solid dividend payouts and excellent capital appreciation over the longer term.
Last week, the Utilities Select Sector SPDR (XLU) hit a 52-week high of $61.38. Many of the utility stocks are currently trading near 52-week high and are expected to scale higher. Below we have highlighted four notable utilities, namely NextEra Energy, Inc. (NYSE:NEE) , Southern Company (NYSE:SO) , Dominion Energy Inc. (NYSE:D) and Exelon Corporation (NYSE:EXC) . Let’s analyze the driving factors behind each stock individually.
Strategic Capital Investments Bode Well for NextEra
NextEra — the biggest utility stock in terms of market capitalization — hit a 52-week high of $208.91 a couple of days back, before closing the trading session a tad lower at $206.22. The stock has increased 18.7% on a year-to-date basis. In the past five years, NextEra’s earnings increased around 8%, compounded annually. The company’s dividend growth has been impressive. Well chalked-out capital investment plan, solid portfolio of natural gas pipeline projects and the addition of renewable generation assets are boosting the firm’s performance.The Zacks Rank #3 (Hold) company intends to invest nearly $39.5 billion in different projects over the 2019-2023 period. These investments will be directed to modernize and strengthen the existing infrastructure of the company, enabling it to serve the expanding customer base more effectively. You can see Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.