Pull The Plug On Utility Stocks
People say that, “Everybody loves a winner.” If that is true, then investors must have really been loving their utility company shares in 2014.
Total return on the normally stodgy group had been beating the major indices even before Christmas week. In the three and a half-day holiday-shortened week they added an amazing 3.56%, more than four times the period’s gain in the S&P 500 (SPX).
The industry group is now more than two standard deviations above normal. Statisticians will tell you the odds of a pullback are more than 90%. The, very predictable, 10% - 25% potential loss in value could wipe out years of dividend payments.
Read more at: GuruFocus
Disclosure: None.
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Updates as of Jan 12, 2015:
Just Energy Group is ticker (JE) with current dividend of 8.5%
Atlantic Power (AT) dividend is now 12%
TransAlt (TAC) dividend dropped to 6.9%
And if yields are your thing, you might want to consider these high yield utility stocks:
Stock name / ticker / % yield
Just Energy Group (JT) 16.25%
Atlantic Power (AT) 14.33%
TransAlta Corporation (TAC) 7.89%