Don’t Focus on Utilities Stocks’ Low Dividend Yields
#InvestingInsights #UtilitiesStocks #DividendInvesting
Growth driven by demand for data centers is the real story for the sector today.
The Morningstar Utilities Index currently yields less than 3%, which is the lowest dividend yield for the utility sector in at least 40 years. Meanwhile, interest rates are approaching 5%, which is a 20-year high. That’s a big difference. What does it mean for investors who are considering utility stocks? Have opportunities dried up? Not so, according to a recent Morningstar report called Mind the Yield Gap. Joining me today is co-author Travis Miller. He’s a senior analyst covering utilities and energy stocks for Morningstar.
Utilities: Investors Counting on Growth to Stop Recent Slump
https://www.morningstar.com/stocks/utilities-investors-counting-growth-stop-recent-slump
On this episode:
00:00:00 Welcome
00:01:00The Utilities Yield Gap: This Time is Different
00:04:49 Data Centers are Driving Growth—and Creating a Backlash
00:09:18 Regulatory Risk Poses a Threat
00:13:51 These Companies are Poised for Growth
00:18:41 But What About Dividends?
00:22:54 Key Takeaways for Investors Considering Utilities Stocks
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This episode is sponsored by Vanguard: https://advisors.vanguard.com/engagement/fixed-income
