Could Utilities Stocks Take a Hit After a Year of Transformation?

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Entergy Corporation Berita

Duke Energy Corporation,American Electric Power Company Inc,Portland General Electric Co

Stocks Analysis by Dave Gilreath covering: Entergy Corporation, Duke Energy Corporation, American Electric Power Company Inc, Portland General Electric Co. Read Dave Gilreath's latest article on Investing.com

Over the first half of this bull market, utilities stocks lived up to their classic reputation as a defensive sector, delivering precious little in the way of gains, but reducing portfolio risk while paying reliable dividends.

Propelling this demand is an endless profusion of new rechargeable electrical consumer products — everything from lawn mowers to self-guided vacuum cleaners to interactive dog toys to teeth flossers, and on and on. Better rechargeable battery technology has eliminated much of the need for consumers to buy traditional batteries, and has freed them from cords and plugs once essential for many high-consumption appliances.

Regardless, even with public support, it would take several years before any new plants for public utility generation could be built on American soil, as the process of getting regulatory approvals alone would be long, hard slog. The fortunes of power companies, of course, are joined at the hip with those of industrial concerns.

But what if the Fed decides against further cuts or to slow-walk them, leaving rates higher for longer? Sector dividends increased 5.6% this year, and they’re positioned to do so again in 2025, especially among the few dozen utilities stocks that hold the venerable title of dividend achievers — those that have raised their dividends every year for at least a decade.

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