Utility Stocks

September is usually a weak month for the stock market. Of the numerous reasons, the most common is that investors take time off during the summer months, which leads to an overall decrease in trading volumes.

Three leading indexes of the stock market, Dow Jones Industrial Average (DJIA), S&P 500 and Nasdaq, have typically performed the worst in that month. Against the backdrop, investors can bet on domestic-focused utility stocks, which are steady performers and payout regular dividends.

4 Utility Stocks That Are Listed By Zacks:

FirstEnergy Corporation (FE) delivered an average positive earnings surprise of 4.74% in the past four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 3.0% and 0.4% in the past 60 days, respectively. The company’s expected EPS growth for the next five years is pegged at 6%. FirstEnergy has a dividend yield of 3.79%, higher than S&P 500 Composite’s 1.78%. In the past six months, the company’s shares have gained 13.0%.

IDACORP, Inc. (IDA) delivered an average positive earnings surprise of 10.10% in the past four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings inched up 2.1% and 0.9% in the past 60 days, respectively. The company’s expected EPS growth for the next five years is pegged at 2.80%. IDACORP has a dividend yield of 2.37%.In the past six months, the company’s shares have gained 19.3%.

DTE Energy Company (DTE) delivered an average positive earnings surprise of 5.69% in the past four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 6.7% and 3.6% in the past 60 days, respectively. The company’s expected EPS growth for the next five years is pegged at 5.30%. DTE Energy has a dividend yield of 3.12%. In the past six months, the company’s shares have increased by 11.1%.

Ameren Corporation (AEE)   delivered an average earnings surprise of 7.69% in the past four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 5.6% and 0.6% in the past 60 days, respectively. The company’s expected EPS growth for the next five years is pegged at 6.60%. Ameren has a dividend yield of 2.80%. In the past six months, the company’s shares have returned 19.7%.

What To Look For In The Market & With Stocks

A utility is an important piece of meeting basic requirements of households, businesses and the industry. The stability of electricity, water, and natural gas services is not dependent on economic volatility. Utilities supply essentials that have no viable replacement. These are some of the factors that are the primary reasons for the steady performance of these companies

Utility companies continue to reward shareholders and raise their value through regular dividend and share buyback. This makes it a better investment options compared with bonds.  In spite of U.S. administration’s recent move to revive the usage of coal, the utilities in the country are gradually shifting from coal and focusing on other fuel sources, which emit negligible volumes of carbon dioxide.

However, capital-intensive utilities still have their share of weaknesses. Stringent emission rules, weather fluctuation and higher debt loads amid rising interest rates are big concerns for companies like this.

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