July 2, 2019

5 Utility Stocks to Buy for an Extra Durable Portfolio


These five utility stocks to buy should be able to rally so long as inflation remains checked



Utility stocks were supposed to be yesterday’s favorite investment. The theory regarding utility stocks was simple: Robust economic growth coupled with a full labor market was supposed to spark rising inflation. The Fed was supposed to fight rising inflation with rate hikes. Fixed income yields were supposed to rise. Utility stocks, which were long viewed as bond substitutes in an era of ultra-low interest rates, were supposed to fall.

But that theory hasn’t fully materialized into reality.

The result? Utility stocks haven’t lost their shine. With inflation relatively contained and investors ducking into safety, stocks in utilities are still attractive assets to own for dividend yield hunters. Utilities Select Sector SPDR Fund(NYSE: XLU), a utilities ETF, has jumped  13.5% in 2019.

The markets’ recent volatility has contributed to the XLU’s gain, as investors flee toward any safe haven. Not to mention, a number of other catalysts are in play. Inflation isn’t soaring higher because technology giants are suppressing inflationary pressures (just think about the downward pressure Amazon (NASDAQ:AMZN) is putting on all consumer goods prices). This trend won’t reverse any time soon, and thus, inflationary pressures should remain subdued for the foreseeable future. With those forces subdued, utility stocks have room to rally.


With that said, what are the best utility stocks to buy for your portfolio? Here’s a list of five stocks that I think are worth a look:



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