Go back 11 months and the utilities sector was not the place to be, as it was significantly underperforming most other sectors. About three-and-a-half months later came a shift, and utilities starting performing a bit better after months of mostly sideways price action. In the last couple of months, utilities has been one of the stronger performers. It shows that investors and traders are wary of an overall stock market correction, and are moving into the relative safety of utility stocks to show it. Here are four utility stocks which investors seem especially interested in right now.
Companhia de Saneamento (NYSE:SBS) is up 8.13% over the last week, after rallying aggressively off strong support in the $8.25 region. There is minor resistance between $10 and $10.25, although primary resistance is not until $11.25 to $11.50 which marks the stop of a multi-month range. Any pulls backs should find support above $8.75 (old downward trendline). If it drops below that, the former lows will likely be tested again. Aside from recent strength, another attractive feature of the stock is the 3.12% dividend yield.
PG&E Corp (NYSE:PCG) is up 6.16% over the last week, and is fast approaching the $45 resistance area. After forming a strong multi-month base between $39 and $40, overall the stock has been advancing higher, albeit in a choppy fashion. Since late February the stock has been in an expanding range, creating a higher-high but also a lower swing-low. Ultimately the price will need to break above this formation to indicate when the uptrend is continuing. If that occurs, the next target, and likely resistance area, is between $47 and $48. This stock also boasts a 4.09% dividend yield.
Windstream Holdings (Nasdaq:WIN) is up 4.99% over the last week, and clawed its way above a couple strong resistance levels. While currently below it, $8.75 was a price level the stock struggled to surpass for a number of months (unadjusted chart). The strong rally into and above the region shows promise for Windstream being able to continue higher. There is minor resistance through to $9.17, while a rise above that provides a target of $9.75. This is still a resistance area though, so if the price falls back below about $8.15, resistance will have held and the price is likely to continue to channel between $8.75 and $7.25. Though, with an 11.59% dividend yield you may not even care what the stock price does.
Wisconsin Energy (NYSE:WEC) has been in an uptrend throughout 2014, and advanced 2.29% over the last week. April 4 started out strong, but the stock ultimately finished only marginally higher, showing there is some selling pressure above $47.40. The current trendlines provides potential support near $45. If the price were to drop below that, it doesn't mean the uptrend is over, just that a deeper retracement is underway. $43 and $42 both provide additional support. The stock offers a 3.32% dividend yield.
The Bottom Line
The recent price action in these utilities stocks shows investors are interested. With the strong run higher in the stock market overall, utilities provide some relative safety in the event of a correction. The dividend yields, ranging from 3.12% to 11.59%, contribute to that relative safety, as the dividends help offset potential capital losses. Before trading, set limits on the amount you are willing to risk and stay within those limits.
Charts provided by Stockcharts.com
Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.