S&P 500   5,055.61 (+1.48%)
DOW   38,859.21 (+0.64%)
QQQ   436.01 (+2.44%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,055.61 (+1.48%)
DOW   38,859.21 (+0.64%)
QQQ   436.01 (+2.44%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,055.61 (+1.48%)
DOW   38,859.21 (+0.64%)
QQQ   436.01 (+2.44%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,055.61 (+1.48%)
DOW   38,859.21 (+0.64%)
QQQ   436.01 (+2.44%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)

Don't Overlook This Reliable, Dividend-Paying Sector

utilities stocks to buy

Key Points

  • On March 15, utilities advanced 1.36% in volume which was 92% heavier than normal. 
  • That was the best performance among the 11 S&P sectors in the session.
  • Utilities also lead the S&P over the past five sessions.
  • One small cap was among the best gainers.
  • Another small cap has one of the sector's best yields. 
  • 5 stocks we like better than Utilities Select Sector SPDR Fund

What happens when markets go into panic mode? Investors turn to asset classes or sectors they believe are likely to either pay a dividend or that have a low correlation to equity markets. 

On March 15, utilities, as tracked by the Utilities Select Sector SPDR Fund NYSEARCA: XLU, advanced 1.36% in volume which was 92% heavier than normal. 

That was the best performance among the 11 S&P sectors in the session. Utilities are also the best performers over the past five sessions. Those gains occurred as markets were rattled by banks in the U.S. and Europe. 

The sector’s top four components rose in the March 15 session. Those stocks and their daily percent changes were:

When it comes to the sector internals, American Electric Power and Xcel Energy Inc NASDAQ: XEL were among the day's top performers, posting gains of 2.6% and 2.2%, respectively.

Here are some lesser-known utilities that have stood out from the pack recently. Both are very small companies, meaning it may be riskier to trade. 


Genie Energy

Small-cap Genie Energy Ltd. NYSE: GNE was the utility with the best gains, advancing 4.15% in the session in heavier-than-average turnover.

Never heard of Genie? That’s not a surprise, given that the stock only has a market cap of $244.1 million. The Newark, New Jersey company provides electricity, natural gas, and solar power to residential and small business customers in the U.S. and Europe. Despite a 23% drop immediately after reporting earnings on March 13, the stock is up 50.51% on a one-year basis. 

Many small companies got slammed on Monday as investors fretted about their exposure to banks unable to give depositors their money. 

However, in the earnings call, Genie CEO Michael Stein offered reassurances, saying, “We tend to put our deposits with even larger financial institutions than those and the ones that are a little bit more run of the mill as opposed to more niche kinds of players. And our money is in very safe triple-pay-rate kinds of instruments. But yes, of course, we're constantly reviewing.”

As a group, utilities are known as dividend payers. Even Genie has a yield of 3%. 

Via Renewables

Via Renewables Inc. NASDAQ: VIA  has a yield of 14.8%, the highest in the sector. This is a tiny Houston-based company whose market cap is just $78.2 million. 

The company, formerly known as Spark Energy, is an independent retail energy services company providing electricity and natural gas to residential and commercial customers in 19 states. 

If your eyes are popping because of the yield, take a minute to consider: In many cases, a stock’s yield is high because shares have dropped. Via Renewables’ dividend per share is $0.73. The share price is down 33.74% on a one-year basis, which explains that yield. 

Use extra caution whenever you see a stock with a very small market cap, as well as a too-good-to-be-true dividend yield.

What’s Next For Utilities? 

According to a utility-industry analysis by consulting firm Deloitte, five main trends are likely to affect utilities in 2023. 

  • Utilities increasingly plan to roll out the next wave of advanced metering infrastructure.
  • Environmental, social, and governance (ESG) reporting continues to gain momentum.
  • Battery storage deployments set to accelerate despite supply chain snags.
  • Power and utility companies see opportunities to reap value from clean hydrogen.
  • Utilities are likely to sharpen focus on preparing for electric vehicle growth.

While it may seem like utilities are a sleepy, slow-growing corner of the market, they’re clearly evolving to address and incorporate new technologies. 

Utilities, especially the less volatile larger companies, can be reliable additions to a portfolio, as they typically have dependable revenue streams and dividend payouts. Although they’re not the most exciting sector, they can help mitigate volatility during market downturns.

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Should you invest $1,000 in Utilities Select Sector SPDR Fund right now?

Before you consider Utilities Select Sector SPDR Fund, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Utilities Select Sector SPDR Fund wasn't on the list.

While Utilities Select Sector SPDR Fund currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Utilities Select Sector SPDR Fund (XLU)N/A$61.17-1.3%3.37%20.41N/AN/A
NextEra Energy (NEE)
4.9817 of 5 stars
$56.56-0.9%3.31%15.67Moderate Buy$71.85
Duke Energy (DUK)
4.6722 of 5 stars
$91.50-1.6%4.48%25.77Moderate Buy$100.00
Southern (SO)
4.9682 of 5 stars
$66.81-1.4%4.19%18.41Moderate Buy$73.46
American Electric Power (AEP)
3.9994 of 5 stars
$81.58-1.2%4.31%18.71Moderate Buy$88.73
Xcel Energy (XEL)
4.452 of 5 stars
$58.72-1.8%3.54%18.29Hold$65.00
Genie Energy (GNE)
1.3872 of 5 stars
$17.82-0.8%1.68%7.92N/A
Via Renewables (VIA)
0 of 5 stars
$10.83-0.1%N/AN/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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