Compare Attributes Of 9 Utility ETFs And The Intersection Of Stocks Between Them

by: Richard Shaw

Utilities are typically part of the dividend income allocation of conservative portfolios.

In this article, we examine 9 utility ETFs, and identify 5 individual domestic U.S. utility stocks that are widely held among both the 9 utility ETFs and 8 dividend income ETFs.

Whether an investor chooses to use an investment fund or a selection of individual stocks is a function of a variety of factors, including; how much money they have, how much time and interest they are willing to devote to their portfolio, how large their allocation to utilities is, how much they wish to control expenses, whether they can effectively access they can individual stocks (e.g. international utilities), and whether they perceive they can select a subset of the stocks in the funds for a better return.

The nine utility ETFs in this study are:

  • RYU (Guggenheim S&P 500 Equal Weight Utilities)
  • FXU (First Trust Utilities AlphaDEX
  • VPU (Vanguard Utilities)
  • PUI (PowerShares Dynamic Utilities)
  • XLU (SPDR S&P 500 Utilities Select Sector)
  • DBU (WisdomTree Global ex-US Utilities)
  • JXI (iShares S&P Global Utilities)
  • IDU (iShares Dow Jones Utilities)
  • PSCU (PowerShares S&P SmallCap Utilities)

The following tables provide important valuation, performance and other attributes of the utility ETFs. Where shading is used, the green through yellow to red colors are used to denote the best to worst ETF for each attribute.

Yield, Expenses, Mean Return, Volatility and Sharpe Ratio:

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Calendar Year Total Returns (price + dividend), 2006 - 2011:

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Forward Looking Valuation Multiples & Long-Term Growth:

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Historical Growth:

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Trailing Valuation Multiples:

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Regional Exposure (by domicile):

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Number Holdings, Concentration, Turnover, Assets & Market-Cap:

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Sector Exposure:

They do not all hold only utilities.

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Stock Intersection with Utility ETFs and Dividend ETFs:

There are a couple of hundred stocks in total among the 9 utility ETFs/ There are 151 stocks in those utility ETFs for which Yahoo has data (we use their data in our in-house stock intersection database).

There are 83 of those 151 utility stocks that are also found in 1 or more of 8 dividend ETFs.

The dividend ETFs we cross-referenced are:

  • SDY (S&P 1500 Dividend Aristocrats)
  • DVY (Dow Jones Select Dividend)
  • VYM (FTSE High Dividend Yield)
  • VIG (Vanguard/Mergent Dividend Achievers Select)
  • HDV (Morningstar Dividend Yield Focus)
  • FVD (Value Line Dividend)
  • FDL (Morningstar Dividend Leaders)

The dividend ETFs hold 83 of the stocks also held in the utility ETFs. Of those, 5 stocks are held by 6 of the 8 dividend ETFs. Those stocks are:

  • ED (Consolidated Edison)
  • EXC (Exelon)
  • NEE (NextEra Energy)
  • PNW (Pinnacle West Capital)
  • TE (TECO Energy)

The specific intersection of those five stocks with the utility ETFs and dividend ETFs are shown in these two tables:

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We own some individual utilities and XLU. We have owned ED, but do not now, and do not own any of the five listed in this article. Generally, we would prefer to own the individual stocks.

Disclosure: QVM has a position in XLU in some accounts as of the creation date of this article (April 24, 2012).

Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice. You are responsible for your own investment decisions. This article is presented subject to our full disclaimer found on the QVM site available here.