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iShares U.S. Utilities ETF (IDU)

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  • Oct. 16, 2013, 3:21 PM
    • It's a good year for large-cap core mutual funds, with 46% beating the S&P 500 vs. a 10-year average of just 36%, according to Goldman Sachs.
    • The study finds most are overweight health care (XLV), which not coincidentally happens to be the best-performing sector this year, up 30%.
    • The funds are most underweight utilities (XLU), which just happen to be the second worst-performing sector YTD, up 10%. Only telecoms have done worse.
    • Chasing performance? May be, but the team finds the funds have tended to be present in the good performers for the last 12 months, and have retreated from discretionary stocks (XLY) of late despite their outperformance.
    • Individual names? CVS Caremark (CVS), JPMorgan (JPM), and Cisco (CSCO) are the stocks liked the most vs. the benchmark.
    • Health care ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    • Utility ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | Comment!
  • Oct. 15, 2013, 6:58 PM
    • The U.S. Supreme Court today agreed to review the EPA’s approach to regulating greenhouse gas emissions from refineries, power plants and other stationary sources, throwing the Obama administration's landmark rules into a state of uncertainty.
    • The move was applauded by the American Petroleum Institute, which said “the Clean Air Act clearly only requires pre-construction permits for six specific emissions that impact national air quality - not greenhouse gases."
    • The news breathes new life into lawsuits by industry groups and several states that challenged the EPA's regulations; last year, the D.C. federal appeals court sided with the EPA on nearly every issue in the case.
    • ETFs: GRN, IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT, IEO, IEZ, IYE, PXE, PXI, XES, XLE, XOP, VDE, RYE, FXN, OIH, PXJ, PSCE, ERX, DIG, ERY, DUG, DDG.
    | 1 Comment
  • Oct. 8, 2013, 1:04 PM
    • Defense is working nicely today as the utility sector (XLU +1.4%) makes a strong move higher with the rest of the market lit up bright red. Few have had use for the steady dividend payers since rates started rising in May, but the sector has stabilized over the past month and is particularly well-bid today amid panicky action in high-flying momentum favorites.
    • Some individual names: Southern Company (SO +1.9%), Edison International (EIX +1.9%), Duke Energy (DUK +1.6%), FirstEnergy (FE +1.5%), XCel Energy (XEL +2.1%), American Electric Power (AEP +1.6%).
    • Related ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | Comment!
  • Oct. 1, 2013, 2:14 PM
    • "The principle risk [for utilities is] 10-year yields taking another run at 3%," Deutsche's Jonathan Arnold says, in a cautiously upbeat note on the sector.
    • Arnold notes that "regulated utility total return propositions of 7-8%" look good in risk-adjusted terms when compared with "expected market returns in the ~10% range."
    • Upgraded: Duke Energy (DUK +0.4%), Portland General Electric (POR +1.5%), and PSEG (PEG +0.6%).
    • Other Buy-rated names at Deutsche: CMS, ETR, CPN
    • ETFs - IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT
    • See also: Goldman warms to utilities
    | 3 Comments
  • Sep. 24, 2013, 6:25 PM
    • First-generation carbon capture technology on a commercially viable scale likely will not be available until 2020, and will be expensive but not insurmountable, according to a panel at a Platts coal conference.
    • Tom Sarkus, a director with the National Energy Technology Laboratory, foresees the technology raising the cost of electricity by 30%, based on an average of estimates produced by industry and scientific groups.
    • Sarkus says the costs can be reduced as the technology is improved, but warns it will take years before such improvements make it to the market.
    • The topic was given more weight in light of last week's EPA announcement (I, II) that new coal-fired power plants will need to limit carbon dioxide emissions to 1,100 lbs./mw-hour of power produced.
    • ETFs: KOL, XLU, IDU, PUI, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 5 Comments
  • Sep. 21, 2013, 8:25 AM
    • Both critics and supporters of the new EPA draft regulations on CO2 emissions agree on one thing: This will be the final blow to many proposed coal plants.
    • The truth is, U.S. coal generation already was in decline not because of climate regulations, but because of good ol' free-market capitalism; the boom in natural gas production has dramatically increased supplies, sent prices plummeting and prompted a shift away from coal.
    • Among potential long-term winners: U.S. nat gas drillers such as CHK and XOM, drilling services firms such as HAL and BHI, pipeline companies such as SE and KMI, makers of gas-fired turbines such as GE and SI, power generators such as NRG and CPN if electricity prices rise.
    • Likely losers: Coal appears headed for a decline, and companies with large Appalachian operations such as JRCC and ANR could suffer most as more coal comes from cheaper-to-access deposits in the Illinois Basin and Wyoming; big industrial companies, which have used low U.S. power prices as a competitive advantage, are concerned.
    • ETFs: KOL, IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 87 Comments
  • Sep. 18, 2013, 6:39 PM
    • EPA chief Gina McCarthy and Energy Secretary Ernest Moniz defended the Obama administration's climate change plans before a contentious House energy committee today, saying coal-fired power (KOL) will continue but economic growth and environmental protection go "hand in hand.”
    • The first step is for the EPA to issue rules for new plants, which are set to be released this week; McCarthy told the panel the agency will issue the rules for existing plants by June 2014.
    • Carbon capture and storage technology "is feasible and it is available today," McCarthy says, but critics say it is unproven, expensive and nonviable.
    • The EPA reportedly will use Southern Co.'s (SO) $4.7B Kemper plant in rural Mississippi as an example that CCS technology is ready, but so far the project is most noteworthy for a $1B cost overrun, legal battles, a revolt by ratepayers and a credit downgrade for the local utility.
    • ETFs: XLU, IDU, PUI, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 8 Comments
  • Sep. 18, 2013, 11:27 AM
    • The sector may be ready to be a defensive favorite again, writes analyst Michael Lapides, as declines have left utilities trading at 13.5x-14x 2015 EPS estimates, inline or even slightly below the average of the past 5-10 years.
    • It's a tepid endorsement and Lapides and team aren't yet ready to turn bullish on the overall sector, but did raise ConEd (ED +0.1%) to a Buy while removing NRG Energy (NRG -2.4%) from Goldman's Conviction Buy list. After underperforming NRG by 12% YTD, Calpine (CPN -1.9%) now represents Goldman's preferred way to get exposure to the tight Texas power market.
    • Other favorites include NextEra Energy (NEE +1%) and American Water Works (AWK +0.5%).
    • Utility ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | Comment!
  • Sep. 12, 2013, 1:39 PM
    • Dividend payers may be a good place to hide out from rising interest rates, but those stocks sporting the highest yields - telecoms and utilities - tend to have slow payment growth, making them less-attractive as rates rise. Checking back to the 1994 bond bear market, telecoms and utilities were among the market's worst performers.
    • Better to shop for modest payers, but above-average payment growth. Barron's screens for those characteristics combined with reasonable overall valuation and turns up three names: Boeing (BA), CVS Caremark (CVS), and GE.
    • Certain dividend ETFs employ this strategy as well, with Vanguard's Dividend Appreciation (VIG) - almost zero exposure to telecoms and utilities  - and WisdomTree's U.S. Dividend Growth ETF (DGRW) coming to mind. Others include DGRS, DNL, EMDG, DGRE.
    • Other dividend ETFs: FDL, FVD, MDIV, QDF, QDYN, QDEF, DIV, CVY, DVY, HDV, IYLD, PEY, PFM, SCHD, SDY, SDYL, DVYL, VYM, DHS, DTD, SYLD, KBWD, SPHD, DLN, DON, HILO.
    • Telecom and utility ETFs: IYZ, XTL, VOX, LTL, TLLIDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 4 Comments
  • Sep. 11, 2013, 12:52 PM
    • The Obama administration is considering banning new coal plants without increased emission standards, Bloomberg reports.
    • Revised EPA rules are under White House review and could be reworked before a scheduled Sept. 20 release, but it appears new coal plants would need to install expensive equipment to limit climate-change emissions.
    • The revised standard would retain a provision letting utilities phase-in the capture technology over time, a source says.
    • ETFs: KOL, XLU, IDU, PUI, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
    | 6 Comments
  • Sep. 11, 2013, 12:19 PM
    | 2 Comments
  • Aug. 16, 2013, 4:25 PM
    • The week's ETF movers - Gainers: GDXJ +17.65%. PSLV +14.72%. SIVR +13.19%. SLV +13.06%. GDX +12.54%.
      ETF Losers: VNQ -6.59%. IYR -6.45%. BRF -5.15%. XLU -4.09%. IDU -4.02%.
    | Comment!
  • Jul. 24, 2013, 1:29 PM
    Utilities (XLU -1.7%) lead the way lower today as interest rates shoot higher. Also taking a hit are basic materials (XLB -1.2%) and energy (XLE -1.5%) as most commodities, including oil (USO -1.8%), are lit up bright red. Bank of America, AIG, and Berkshire Hathaway are among the financial sector (XLF -0.6%) stocks taking a breather after big runs for most.
    | Comment!
  • Jul. 10, 2013, 4:41 PM
    Utility (XLU, IDU) dividends grew at an annual clip of 5%-8% during 2008-12, but 2013 is shaping up to be much different. Continued dividend expansion requires "earnings growth, which is becoming harder to generate for utilities, given the sales trend," a Deutsche Bank analyst says, seeing dividend growth rates likely to be capped by earnings growth rates of 4%-5% for the next few years.
    | 4 Comments
  • Jul. 5, 2013, 10:58 AM
    Utilities stocks (XLU -1.2%) are under heavy selling pressure as interest rates soar: EXC -1.7%, EIX -2%, FE -1.9%, PCG -1.5%, ED -1.4%, D -1.2%, PEG -1.3%, DUK -1.2%, NU -1.7%, SO -1%, NEE -1%, NRG -1.3%, SRE -1.6%, ETR -2.3%, XEL -1.7%, AEP -1.3%.
    | 7 Comments
  • Jun. 26, 2013, 8:49 AM
    iShares U.S. Utilities ETF (IDU) announces quarterly distribution of $0.7973. 30-Day SEC yield of 3.36% (as of 05/31/2013). For shareholders of record June 28. Payable July 02. Ex-div date June 26.
    | Comment!
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IDU Description
The iShares Dow Jones U.S. Utilities Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of U.S. utilities stocks, as represented by the Dow Jones U.S. Utilities Index.
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Sector: Utilities
Country: United States
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