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Electric utility stocks look more attractive after a 10%-plus decline since late January, with total annual return potential of 8%-9% in the next few years, according to a Barron's weekend analysis.
- "The relative attraction of utilities has increased in an environment of slower economic growth, when earnings growth is being suppressed by a stronger dollar and energy prices,” Bernstein utilities analyst Hugh Wynne, favoring two California utilities, PG&E (NYSE:PCG) and Edison International (NYSE:EIX), because of above-average growth and a favorable regulatory environment.
- "Utilities and the overall market may provide the same total return, but one offers a lower-risk package,” says Credit Suisse utility analyst Dan Eggers, who is partial to American Electric Power (NYSE:AEP), NextEra Energy (NYSE:NEE) and PG&E.
- Also discussed: SO, ED, DUK, D.