PPL - These 3 Utilities Stocks Could Outperform in a Down Market
The yield curve inverted in August 2019, signaling to many investors that a recession and corresponding equity market pullback were imminent. Historically, there is an 18-month average lag between yield curve inversion and corresponding stock market downturns, but risk-averse market participants may want to consider the merits of increasing exposure to defensive stocks in their equity portfolios.
Defensive stocks, such as utilities companies, experience less deterioration of demand for their products and services during recessions, and they often deliver better-than-average performance in poor market conditions as a result. Utilities companies often pay healthy dividends due to the relative stability of their cash flows and limited growth potential, which is a good way to deliver investment returns in the absence of market appreciation.
Image Source: Getty Images