The crisis-like selloff in the utilities sector, resulting from the spike in interest rates, has created historically attractive buying opportunities for a number of stocks, KeyBanc Capital’s Sophie Karp wrote.
The ETF has tumbled more than 16% since the end of July. Previous times the ETF saw bigger declines over a similar period include the height of the COVID crisis in March-April 2020 and in the midst of the financial crisis of late 2008 into early 2009. The utilities ETF’s selloff has lifted its dividend yield to 3.78%, which is the highest yield of the SPDR ETFs tracking the S&P 500’s 11 sectors, and more than double the implied yield for the S&P 500 index SPX of 1.64%.
In the “high quality” bucket, she upgraded the stocks of CenterPoint Energy Inc. CNP, -0.13%, CMS Energy Corp. CMS, -0.24% and DTE Energy Co. DTE, -0.93% to overweight from sector weight. She also reiterated her overweight ratings on the shares of Ameren Corp. AEE, -0.34%, WEC Energy Group Inc. WEC, -0.08% and Xcel Energy Inc. XEL, -1.36%