XLU - XLU: Utilities Are Attractive Some More Than Others

2024-06-03 13:48:36 ET

Summary

• Utilities have become attractive investments due to cheaper valuations and improved fundamental growth.
• The utilities sector has underperformed recently, but there is potential for higher returns in the future.
• Certain utilities stocks, such as Pinnacle West, Duke Energy, and Dominion Energy, are well-positioned to capture growth in electricity demand.

In the last few years, there have been 2 key changes to the investment prospects for utilities:

1. Valuation has gotten cheaper
2. Fundamental growth has improved.

With higher growth than normal and reasonable valuation, I think utilities have become attractive investments. While the sector as a whole looks opportunistic, certain individual stocks within are better positioned than others....

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