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Tickers in this Article: EXLP, XTXI, NRGM, ETP, NWE, TCP, SEP
The Nasdaq is trading up 0.4%, the S&P 500 has climbed 0.1% and the Dow has slipped 0.2% so far today. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

The biggest movers in the Utilities sector (XLU) (+0.3%) are:
CompanyMarket CapPercentage Change
Exterran Partners (Nasdaq:EXLP)$920.9 million+2.2%
Crosstex Energy (Nasdaq:XTXI)$667.7 million-1.8%
Inergy (NYSE:NRGM)$1.77 billion+1.7%
Energy Transfer (NYSE:ETP)$10.36 billion+1.4%
NorthWestern (NYSE:NWE)$1.33 billion-1.4%
TC (NYSE:TCP)$2.43 billion+1.1%
Spectra Energy (NYSE:SEP)$3.09 billion-1.1%
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Rising 2.2%, Exterran Partners (Nasdaq:EXLP) is currently trading at $22.28 per share. At 28,277 shares, the company's volume so far today is 0.3 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios include the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. EXLP has a high capitalization ratio of 58.3%. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Crosstex Energy (Nasdaq:XTXI) is currently trading at a share price of $13.84, a 1.8% decline. So far today, 40,408 shares have changed hands. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for XTXI is 3.4%. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Due Diligence On Dividends

Inergy (NYSE:NRGM) is up 1.7% to reach a current price of $23.94 per share. The company's volume is currently 3,105 shares for the day, 0.1 times the average daily volume. The trading volume for a stock indicates the level of investor interest. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. NRGM's P/E ratio of 59.8 is above the industry average of 24.99. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Energy Transfer (NYSE:ETP) has risen 1.4% to hit a current price of $42.81 per share. The company is trading at a volume of 1.1 million shares. This is on pace to reach yesterday's trading volume of 2.5 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. ETP has a PEG ratio of 0.7. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

At $35.36, NorthWestern (NYSE:NWE) has slipped 1.4%. The company's volume is currently 143,750 shares for the day, consistent with its average over the last three months. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. NWE's P/B ratio of 1.46 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

TC (NYSE:TCP) has risen 1.1% and is currently trading at $45.97 per share. The company's volume for the day so far is 9,291 shares. A stock's volume conveys how excited investors are about it. A company's value as an investment is more easily estimated using valuation ratios such as the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for TCP is a high 34.21. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Currently trading at $31.67 per share, Spectra Energy (NYSE:SEP) has fallen 1.1%. So far today, the company's volume is 56,533 shares, in keeping with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. Dividend yield measures the income that a stock will generate for an investor. SEP's dividend yield is 6.1%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn

The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.

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