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Quarter-End Insights

Our Outlook for Utilities Stocks

Interest rate fears leave several high-quality dividend-paying utilities looking cheap.

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  • After scorching returns during the first four months of 2013, regulated utilities have underperformed every sector except real estate since April, down 9%.
  • Even through the ups and downs of interest-rate outlooks, the utilities sector average dividend yield continues to hover around 4%.
  • Recent coal and nuclear plant closures highlight the competitive threats in wholesale power markets from low natural gas prices and renewable energy incentives.

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