During bear markets utility stocks used to provide shelter for investors since they were considered to be stable, slow-growth and conservative investments. However that has changed in the past few years. These days they do not seem to offer the much-desired stability and protection that they were once known for. This is evident in the current market as well.
Year-to-date the S&P 500 is down 38.96% and the Utilities sub-sector within the index is down 29.82%. Though this is less than the S&P 500, the sector is still down around 30% for the year - which is very high for this sector. On the other hand, the best performing sector, consumer-staples, is down only 17.02%. On the global level, the SPDR SP International Utilities Sector ETF (NYSEARCA:IPU), started in July of this year, has a negative return of 29.09% year-to-date.
Overall, although utilities have lost their former glory, they must still be an integral part of a well-diversified portfolio. Usually utilities have high yields and are long-term value plays. Some of the foreign utilities have attractive yields and are worth looking into at current levels. The following table lists all these utility stocks with their current yields:
|Transportadora de Gas Del Sur S.A.||TGS||Argentina||$1.98||3.20%|
|Brookfield Infrastructure Partners L.P.||BIP||Bermuda||$11.75||7.52%|
|COMP ENERG CEMIG ADS||CIG||Brazil||$15.83||3.46%|
|CPFL Energia S.A.||CPL||Brazil||$43.47||9.00%|
|Centrais Electricas Brasileiras S.A.||EBR||Brazil||$11.54||2.29%|
|Companhia Paranaense de Energia||ELP||Brazil||$11.84||1.33%|
|Companhia de Saneamento Basico do Estado de Sao Paulo||SBS||Brazil||$20.92||N/A|
|Consolidated Water Co. Ltd.||CWCO||Cayman Islands||$10.70||2.43%|
|Empresa Nacional de Electricidad S.A.||EOC||Chile||$34.85||2.15%|
|A-Power Energy Generation Systems, Ltd.||OTC:APWR||China||$4.30||N/A|
|Huaneng Power International Inc.||HNP||China||$26.95||6.31%|
|Veolia Environnement SA||VE||France||$25.14||7.51%|
|Korea Electric Power Corp.||KEP||South Korea||$9.30||N/A|
|Cascal N V||HOO||United Kingdom||$4.42||4.07%|
|National Grid plc||NGG||United Kingdom||$52.31||3.62%|
Note: All data is as of Nov 28 closing prices.
Half of the listed above are from Latin America. The dividends offered by the Brazilian utilities vary wildly over months. Just three companies from Europe are represented here because some of the European utilities such as E.ON (OTCQX:EONGY) of Germany now trade on the OTC market.
It must be noted however that many of the stocks mentioned above have fallen over 50% so far this year. So some of the current high yields may not offer consolation for investors who bought the stocks earlier at higher prices. However new investors can use the table as a starting point to do further research into the above global utility stocks.
Disclosure: Long VE