Entering text into the input field will update the search result below

Utilities Dashboard - Update


  • Valuation metrics in utilities.
  • Evolution since last month.
  • A list of stocks looking cheap in their industries.
  • Members of my private investing community, Quantitative Risk & Value, receive access to my breaking news coverage of this idea. Get started today >>

This article series provides a monthly dashboard of industries in each sector of the GICS classification. It compares valuation and quality factors relative to their historical averages in each industry.

Executive summary

All industries are overvalued in utilities, and profitability doesn’t justify it. The only valuation factor reported below that looks better than historical averages is the price/sales ratio of power producers/traders. However, this group is also the worst for the profitability metric, both in absolute value and relative to its historical baseline. Combining 2 valuation factors, electric utilities and multi-utilities are the most overpriced industries in the sector.

Anyway, I think systemic risk is more important than market valuation to manage a portfolio (click here to learn more about it). Since last month:

  • P/E has improved in water utilities and deteriorated in electric utilities and power producers/energy traders.

  • P/S has improved in electric utilities, gas and water, and deteriorated in multi-utilities.

  • ROE is stable in all groups except a deterioration in power producers/energy traders.

  • The Utilities Select Sector SPDR ETF (NYSEARCA:XLU) has lagged the SPDR S&P 500 ETF by 3.3%.

  • In this period, the best performing S&P 500 Utilities stocks are AES Corporation (AES), DTE Energy (DTE), Edison International (EIX), NRG Energy Inc. (NRG), and Southern Co. (SO).

Some cheap stocks in their industries

The stocks listed below are in the S&P 1500 index, cheaper than their respective industry factor for price/earnings and price/sales. The 10 companies with the highest return on equity are kept in the final selection. I update every month several lists like this in various sectors. Quantitative Risk & Value Members have an early access to these lists before they are published in free articles. Click here to read about performances. This is not investment advice. Do your own research before buying.



This article was written by

Fred Piard profile picture
Data-driven portfolios and risk indicators.
Author of Quantitative Risk & Value and three books, I have been investing in systematic strategies since 2010. I have a PhD in computer science, an MSc in software engineering, an MSc in civil engineering and 30 years of professional experience in various sectors. My aim is making simple and efficient quantitative investing techniques available to my followers. Quantitative models can make investment decisions faster, reproducible and emotionless by focusing on relevant information in the middle of market noise. Moreover, models can be refined to meet specific risk tolerance and objectives. 

Step up your investing experience: try Quantitative Risk & Value for free now (limited offer).

I am an individual investor and an IT professional, not a finance professional. My writings are data analysis and opinions, not investment advice. They may contain inaccurate information, despite all the effort I put in them. Readers are responsible for all consequences of using information included in my work, and are encouraged to do their own research from various sources.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.