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Monday, November 26, 2012, 12:42 PM The only S&P sector in the green today is the recently-battered utilities (XLU +1.2%). Through Friday, the stocks were the market's worst performers in November, falling 7% amidst worries of a hike in the dividend tax rate (Sandy didn't help either); never mind the fact so much of the holdings are in tax-advantaged accounts. 1 Comment [Energy]
Tuesday, November 20, 2012, 8:20 AM The recent selloff in dividend stocks represents a buying opportunity, says dividend fund manager Judith Saryan. She's expecting an eventual hike in the dividend tax rate, but to levels far below those for ordinary income. For now, she's steering clear of "frothy" utilities (XLU) and consumer staples (XLP), and looking more to dividend "growth" rather than "yield." Top picks: SNY, LYB, WFC, QCOM. Comment! [Quick Ideas]
Friday, November 16, 2012, 12:28 PM The pullback over the last 2 months is especially notable as no sector within the S&P 500 has been spared, notes Bespoke. It's extremely rare for this to happen as bear moves usually see money flow into defensive sectors like Utilities or Healthcare. With looming tax hikes on dividends and capital gains, investors are dumping it all. 13 Comments
Wednesday, November 14, 2012, 5:21 PM A look at sector performance in the 2 months since the Fed's QE∞ announcement finds tech (XLK), -11.6% the laggard by a wide margin. The materials sector (XLB) has about matched SPY's 7.3% decline. The top performer is healthcare (XLV), -2.7%. Industrials (XLI), staples (XLP), discretionary (XLY), financials (XLF), and utilities (XLU) have marginally bested the S&P. 4 Comments
Wednesday, November 14, 2012, 2:05 PM The utility sector is generally lower after New York Gov. Andrew Cuomo began an investigation into the state's utility providers, saying a major overhaul of the industry is needed. FirstEnergy (FE -1.3%), Northeast Utilities (NE -1.2%) and Westar Energy (WR -1.1%) are all down more than 1%. 3 Comments [Energy, On the Move]
Monday, November 12, 2012, 1:07 PM A 7% decline in the Utility SPDR (XLU) in November puts the ETF in the red for the year (even after the dividend). Worries over a hike in the dividend tax rate are surely a factor (fade those, say some), but the sector is also likely to feel the "regulatory wrath" for outages following Sandy, writes Alan Brochstein. 2 Comments [Energy]
Monday, October 29, 2012, 1:15 PM Some areas of the dividend universe (telecom, utilities) may be pricey, but dividend stocks are not in a bubble, says ClearBridge's Mike Clarfeld. He suggests looking not just at the upfront yield, but instead at the ability of the company to increase the payout over time. "The sweet spot ... attractive dividends, but really dividend growers - we don't think they are overvalued at all." 1 Comment
Saturday, October 27, 2012, 8:33 AM Bearishness among heavy-hitter money managers surveyed by Barron's rises to 27%, nearly double the amount from April's poll. As for individual sectors, there's no love for the utilities, with just 1% of respondents picking it as the best-performing industry over the next 12 months, and 20% choosing it as the worst. We've given away the answer, but guess which is today's cover. Feel better, bulls? 16 Comments
Friday, October 19, 2012, 9:10 AM "Investors need to understand the growing risks of overplaying the defense card," writes AllianceBernstein's Joe Paul, exploring whether high-yield stocks are in bubble territory. It's not news they're expensive compared to past metrics, but high-yielders now make up a record 44% of the S&P 500 (on a cap-weighted basis). "As a countermeasure, (investors) may want to add more cyclical, deeper-value names." 2 Comments
Wednesday, October 17, 2012, 9:13 PM Currently weighting U.S. telecoms and utilities at zero in his dividend stock portfolio, Pimco's Brad Kinkelaar notes both sectors are trading at near off-the-chart premiums to their average relative multiple. Dividend investors would do better to look overseas, he says, where one can find companies that are growing, paying good dividends, and trading at better value. An excellent presentation. 7 Comments [Quick Ideas]
Thursday, October 11, 2012, 8:23 AM Bonds are expensive, but so is hurricane insurance in Louisiana, writes Keith McCullough, recommending everyone's favorite hated asset as protection against a slowing economy and Bernanke's bubbles. Oct. 2012 is reminding him of Oct. 2007, when investors were more concerned with the past (double-digit gains YTD) than the future (sliding earnings). Also good insurance: The dollar (UUP) and utilities (XLU). 2 Comments [U.S. Economy]
Saturday, October 6, 2012, 9:00 AM The financial (XLF) and healthcare (XLV) sectors were the big winners this week, both adding to their gains relative to the S&P YTD. Another YTD outperformer, tech (XLK) combined with energy (XLE) to be the weakest sectors this week as both Apple (post-iPhone 5) and oil (post-QE∞) can't shake their hangovers. The defensive utility area (XLU) - which had a big (and worrying to some) run from mid-Spring to mid-Summer - continues to lose ground to the broader market. 3 Comments
Saturday, August 25, 2012, 10:00 AM Southern Co. (SO) and Verizon (VZ) may be the "poster children" among high dividend-payers as the quest for yield takes the utility (XLU), telecom (IXP), and consumer staples (XLP) sectors to frothy levels. The flip-side are health-care services (XHS), autos (CARZ), housing (IYR), and tech (XLK) - lower payers, but with relative valuations that have rarely been this cheap. 17 Comments [Quick Ideas]
Monday, August 20, 2012, 4:24 PM While 80% of S&P 500 stocks are above their 50-day moving average, all of the defensive sectors - Telecom, Consumer staples, Health care, Utilities - have readings below that. The most defensive of them all - Utilities - shows just 39% of the sector above the 50-day, a sharp change from just 2 weeks ago, when 90% were above. "The dynamic has clearly changed," writes Bespoke, with cyclical sectors now leading the charge. 7 Comments
Friday, August 17, 2012, 8:59 AM Another graphic look (via ukarlewitz) at the recent rally which is notable for its rotation into roughed up sectors like Energy, Materials, Industrials, and Discretionary, and out of popular defensive plays like Utilities, Health Care, and Staples. Have the hedge funds been caught wrong-footed again? 2 Comments
Tuesday, August 14, 2012, 8:55 AM More on the BAML fund manager survey: Overowned assets include defensive sectors like REITs, Consumer Staples, Pharma, and Bonds. Underowned: Materials, Banks, Japan, Eurozone, Energy, and Equities in general. Comment! [Quick Ideas]

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iShares Dow Jones US Utilities ETF