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Quarter-End Insights

Our Outlook for Utilities Stocks

Utilities are keeping an eye on Washington in 2011.

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  • Environmental policy we expect to be finalized in 2011 could dramatically alter the outlook for U.S. power producers.
  • Fully regulated electric and gas utilities appear 10%-15% overvalued but still offer historically attractive dividend yields relative to Treasuries.
  • Consolidation continues, but we think the low-hanging fruit is mostly picked.

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