Fixed income investments have become all the rage over the last year. As the Federal Reserve raised rates, a variety of bonds are now yielding amounts not seen in over a decade. Even cash savings accounts and certificates of deposits are paying north of 5%. As a result, investors have been drawn to the safety of bonds and other IOUs.
For other sources of income, the rush to bonds has many feeling a bit flat. This includes utilities. The bond proxies have spent the better part of a year trending down.
However, now could be the best chance to buy the sector in a long time. With plenty of tailwinds, the potential for dividend growth, and capital gains when the Fed finally does cut rates, the utilities offer a compelling value.
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