Travis Miller: Utilities is the one sector that has avoided the downturn in the market this year. We think this makes sense. Utilities are a flight-to-safety sector, and they also benefit from the lower bond yields that have happened so far this year. The utilities that have the highest-quality franchises are the ones that have done the best this year--and, again, we think this makes sense.
One of the high-quality names we like is large-cap Public Service Enterprise Group (PEG). This utility out of New Jersey benefits from lower energy prices as their generation units increase margins and their infrastructure grows with lower energy prices driving demand. It has paid a dividend since 1907 and now yields 3.9%. We recently reaffirmed its narrow moat and positive moat trend, and we think it's trading right around fair value.
We think this is a good name to keep on your watchlist.