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Market Update

4 Overpriced Utilities Stocks to Avoid

The rotation into defensive stocks has lifted utilities shares, but many are now overvalued and the outlook is risky.

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Utilities stocks have been a safe haven for investors this year amid the market’s selloff, but now that security comes with an expensive price tag.

About 75% of U.S. utilities covered by Morningstar analysts are in overvalued territory. The rest are considered fairly priced. Meanwhile, higher inflation could threaten utilities company profits. 

Jakir Hossain does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.