for a retirement portfolio
i like utility stocks -basics - decent return -
With interest rates so low on CDs and Treasury Bonds, the dividends paid by utilities make them attractive. Plus you have potential for the dividend to increase giving you income that tries to keep up with inflation.But in an era of global warming, heavy dependence on coal fired power plants and uncertain future of nuclear energy, not to mention visions of green energy and deregulation of the industry--utility stocks are higher risk than they used to be.Diversification is still a good idea. Don't put all your eggs in one basket.
Consider Roger Conrad's Utility Forecaster, good investment letter, high independent ratings, good history, safe.
Not in my retirement portfolio but in a portfolio that I use to fund a scholarship at my alma mater. Specifically SO, DUK, CNP, and a few other energy stocks and dividend growers. JLC
As part of total return, utilities provide bond-like dividends and very low correlation with the broad market and low volatility. For example, XLU (a utility ETF) has an S&P 500 Beta of .43 .For income, utilities provide very reliable dividends. Per Morningstar's stock screener, of the 231 regulated utility stocks, only 9 cut their dividend over the past 5 years. That's less than 4% during a sharp market downturn.OTOH, using the same M* screen, 48 of these utilites (20.8%) have had an average annual dividend growth rate greater than 3% over the same period.So I would say that for a portfolio diversifier or a source of reliable income, utilities are hard to beat.As an income investor, 7 utilities provide about 12% of my overall income.BruceM
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