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Opinions on Utilities/XLU
Old 08-16-2022, 09:50 AM   #1
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Opinions on Utilities/XLU

Greetings all....

My goal/plan/need is basically over a medium term- to average 5% returns. Anything under 4.5% will hurt a bit, anything over 5.5% will be gravy.

I've had a decent position in XLU and in 1 year - it's up 20% plus about 2.5% or so in dividends. It's at a 52 week high and it seems to be at an all time high.

Part of me itches to make the 20% official - and wait for something else. But then again - between increasing population turning the lights on .....and a long term plan of upgrading grids, and the "EV! EV!" thing coming....I'm thinking - maybe it's still a rather safe place to depend on a 2.5% div and 2-3% average appreciation.

Would appreciate any thoughts..... thanks
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Old 08-16-2022, 11:37 AM   #2
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Old 08-16-2022, 12:05 PM   #3
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Utilities seem too expensive for such minimal growth, speaking very generally.

I prefer banks and selected drug companies. Many still cheap.
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Old 08-16-2022, 12:34 PM   #4
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https://finance.yahoo.com/quote/XLU/profile?p=XLU

Perhaps on a dip in an IRA. (I nibbled at the Vanguard utility ETF in my IRA when it was down, but too high for me at the moment.) Easy enough to put in a limit order if it goes down.
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Old 08-16-2022, 08:07 PM   #5
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I have a fair amount in utilities. I looked at XLU and saw a bunch of giant electrical utilities (plus AWK), not enough diversity for me. Instead I purchased my own set, split between electric /gas, water, trash, and wholesale electric. They currently pay about a 2.6% dividend, growing at 7-8% annually as a group.
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Thanks all
Old 08-17-2022, 02:41 PM   #6
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Thanks all

I read all replies.

I've sold half my XLU. (Hint that means you should buy it - when I sell something it goes up)

Between XLU and UTG I've still got a decent slug of utilities.
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Old 08-17-2022, 02:43 PM   #7
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Just individual companies: DUK and SO.
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Old 08-17-2022, 02:51 PM   #8
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Iíve had DUK since 2018 and added a bunch in 2020. Overall itís up 43% plus all the juicy dividends I collect, nearly $8,000/year. I buy broad market ETFs, but not sector focused ETFs. I prefer to buy a good individual stock in the sector.
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Old 08-18-2022, 07:04 AM   #9
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I'm torn on our EXC and CEG positions. We've had them for 10 years and are up 55% & 114% plus dividends. Most of this is since they spun off CEG. Post split, EXC pays a 2.92% currently and CEG, .71%. I expect these to increase, especially CEG...

The electric market rate is up 40% yoy in TX, so nuclear power is banking on this as the increase is likely driven by natural gas costs for generation. CEG is one of the largest nuclear producing companies in my studies. They're also supposed to benefit from the recent clean energy bill recently signed.

But they have doubled this year... 1st world problems.
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Old 08-20-2022, 11:26 AM   #10
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Just individual companies: DUK and SO.
For me, DUK, SO, NEE, NEP, and especially WEC. I spend dividend income, not "percentages".
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Old 08-20-2022, 11:41 AM   #11
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Quote:
Originally Posted by Surewhitey View Post
I'm torn on our EXC and CEG positions. We've had them for 10 years and are up 55% & 114% plus dividends. Most of this is since they spun off CEG. Post split, EXC pays a 2.92% currently and CEG, .71%. I expect these to increase, especially CEG...

The electric market rate is up 40% yoy in TX, so nuclear power is banking on this as the increase is likely driven by natural gas costs for generation. CEG is one of the largest nuclear producing companies in my studies. They're also supposed to benefit from the recent clean energy bill recently signed.

But they have doubled this year... 1st world problems.

I received some CEG from the EXC spinoff and bought a few more (to get to round lots). Iíll be hanging on to both.

I came across the following recent article/news release about an agreement between CEG and Chicago:

https://www.constellationenergy.com/...g-in-2025.html
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Old 08-20-2022, 01:15 PM   #12
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Originally Posted by MichealKnight View Post
I read all replies.

I've sold half my XLU. (Hint that means you should buy it - when I sell something it goes up)

Between XLU and UTG I've still got a decent slug of utilities.
I was too late, but I would have suggested putting in a stop loss order slightly below the current price and then ratcheting it up periodically if the stock went higher. Best of both worlds.
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Old 08-21-2022, 07:52 AM   #13
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Originally Posted by FLJim View Post
For me, DUK, SO, NEE, NEP, and especially WEC. I spend dividend income, not "percentages".
I'm familiar with DUK and SO.

Your NEE, NEP and WEC seemed interesting, so I peeked on Yahoo Finance and compared them to SO for 1-year, and 2-years, etc. I see that these may be appropriate for a smaller dividend and perhaps more growth.

But I now have a hard rule about trading. If I believe strongly in a company that is not in my list, then I must eliminate a current holding. Otherwise, new money goes to SCHD and SPYD.
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Old 08-21-2022, 09:19 AM   #14
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Years ago, someone on this forum suggested BUI, a leveraged utility ETF, as a buy and hold for a large portion of a portfolio. While I did invest a 5% portion of my portfolio, it has been shedding nice dividends for a while, ranging in price $21-26 over the years. While I have considered selling it, given Blackrock's ESG policy, I haven't found a suitable replacement. Following this thread.
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Old 08-21-2022, 09:41 AM   #15
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I have 3% of investable assets in XLU and VPU (Vanguard). These are good stable equities, which I don't pay much attention to. Just now, looked on Portfolio Visualizer, and saw that they ran neck-to-neck since 2005. Moreover, they roughly keep up with the S&P.

How about that for the most boring sector of the market? Son of a gun. Maybe I should put a little more into it.

PS. Portfolio Visualizer says that XLU and VPU have tripled since 2005, after inflation adjustment. That's 6.68% per year after inflation. Son of a gun!

PPS. I used to pick individual utility stocks, but switched to utility ETFs some years ago.
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Old 08-21-2022, 09:54 AM   #16
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I just looked further, and found that utility stocks are 2.6% of the S&P. Hence, I am just about matching the weight in my own portfolio. Given that I never have much of the stinkin' bonds, I should have a bit more in these boring dividend-paying stocks.
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Old 09-21-2022, 02:04 PM   #17
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Bought a tiny bit of the hair of the dog . . . PEG and NGG.

Have limit orders in to add a tad more if there are any significant drops.
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Old 09-21-2022, 03:45 PM   #18
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I inherited a bit of AEP a couple of years ago. Its held up fairly well the past year.
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Old 09-21-2022, 04:43 PM   #19
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Iíve had AEP and DUK for a long time. Theyíre a steady dividend payer and the stock prices have held up well compared to others.
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