These utility stocks remained resilient despite the effects of the pandemic
The utility sector comprises companies that provide
essential products and services, including water, electricity, natural gas,
sewage, and other services. The sustained demand for these services has helped
utility stocks generate stable earnings.
Due to the reliability of earnings, these companies can
effectively payout dividends at significantly higher average yields. Hence, the
unmatched combination of income generation and profitability makes utility
stocks an excellent low-risk option for investors.
This year, the utility stocks represented by the Utilities
Select Sector SPDR ETF (NYSEARCA:XLU), have underperformed the broader market.
The S&P 500 index grew 6% since the beginning of the year, while the
Utilities ETF fell by nearly 2%.
Tech stocks have ruled the roost this year, but utility
stocks’ importance in a well-rounded portfolio cannot be denied either.
Therefore, let’s look at three utility stocks that remained resilient despite
the effects of the pandemic.
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