THIS Stock is Beating the Market by 27%| Bow Tie Index | Summary and Q&A

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December 23, 2022
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Let's Talk Money! with Joseph Hogue, CFA
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THIS Stock is Beating the Market by 27%| Bow Tie Index

TL;DR

Utility stocks have outperformed the market by 27% in the past year, providing stable cash flows and beating other stocks during market crashes.

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Questions & Answers

Q: What makes utility stocks a good investment?

Utility stocks provide stable cash flows, beat other stocks during market crashes, and often have high dividend yields, making them attractive for income-seeking investors.

Q: Why is Consolidated Edison (Con Ed) a good stock in the utility sector?

Con Ed focuses on clean energy and has a favorable regulatory environment in New York. It has a strong operating margin profitability, consistent dividend growth, and a dividend yield twice the market average.

Q: How is Southern Company (SO) leading in the push for clean energy?

Southern Company has been aggressive in transitioning to cleaner energy sources, reducing coal generation to 20%. It is investing in nuclear, natural gas, and renewables, and could benefit from recent renewable energy incentives.

Q: What are the advantages of investing in the Vanguard Utilities ETF (VPU)?

VPU provides exposure to the entire utility sector in the US, including major players like NextEra and Duke Energy. It offers a diversified portfolio with a lower expense ratio and a solid dividend yield.

Summary & Key Takeaways

  • Utility stocks have shown stability and strong performance, beating the market by 27% in the past year.

  • Consolidated Edison (Con Ed) is a top pick, with a focus on clean energy and a strong dividend yield.

  • Southern Company (SO) is another utility stock with a higher dividend yield, pushing for clean energy and nuclear power.

  • Vanguard Utilities ETF (VPU) offers a broader exposure to the utility sector with a lower expense ratio.

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