Sector Spotlight: Utilities

Sector Spotlight

Each week, my exclusive Portfolio Grader database is updated to reflect what's working in each part of the market RIGHT NOW. Here's a breakdown of the Utilities industry, with a look at one of the very best and one of the very worst stocks in each part of this sector:

Sector	Best	Worst
Electric Utilities	Enersis (ENI)	FirstEnergy (FE)
Gas Utilities	Suburban Propane (SPH)	MetroGas (MGS)
Independent Power Producers & Energy Traders	Empresa Nacional de Electricidad (EOC)	Constellation Energy (CEG)
Multi-Utilities	CH Energy Group (CHG)	TECO Energy (TE)
Water Utilities	Consolidated Water (CWCO)	Cascal (HOO)

Please note that since the Utilities sector is pretty slim pickings, even the best stock some sub-sectors aren’t worth buying. Water utilities are a good example—the top three stocks in this sector are rated “Buy” with B-grades, but aren’t good enough to qualify for my elite A-grade and “Strong Buy” recommendation.

You can view updated lists of the hottest stocks in any sector by clicking on the “Best by Sector” link on the homepage of Portfolio Grader. The database is updated every Monday, so check back often to see what’s hot and what’s not!

 

Last week, I showed you the “risk vs. reward” rating for the Consumer Staples sector. This week, I want to overlay the utilities sector to show you how it compares.

Remember, risk vs. reward is calculated by putting all the good aspects of a stock on one side of a scale and the bad stuff on the other, then seeing which way the scale tips. And remember, a stock with a good risk vs. reward ratio is NOT always low risk.

As you can see in the graph below, Consumer Staples sector in general is much less risky than the Utilities sector. On top of that, the Utilities sector is trending down. This means you have to be very careful about investing in utility stocks.

To read the full Utilities Sector Profit Alert, click here.

Go back to the Sector Profit Alert archive.