A strange thing is happening with utility stocks.
Traditionally, when interest rates move higher – typically
measured by the movement of the 10-year U.S. Treasury yield – investors rotate
away from utilities. But that hasn’t been the case; in fact, the opposite is
true. Instead, the sector’s safety aspect is winning out, and jittery investors
are piling into the space.
“In a market like this, in a dramatic selloff, the
rotational effects will be higher than the interest rate effect,” says Jay
Hatfield, CEO and portfolio manager at Infrastructure Capital Management.
Broadly speaking, according to stock market research firm
Birinyi Associates, independent power producers and electric utilities are best
at handling the market adversity. Multi-utilities and water providers are
losing ground, just like the rest of the market.
But specifically, what are the best stock picks in this
defensive sector – where investors can duck for cover? Here are 10 utility
stocks to buy that yield an average of 4.1%.
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