In times of duress, investors often turn to steady stocks. Throughout the coronavirus pandemic this playbook was intact: Investors continued to jump head first into strong dividend payers with top-notch franchises to keep their portfolios afloat during the hard times. However, as consumer staples, healthcare and even industrials got the nod, one traditional “steady-eddy” was left behind.
We’re talking about utilities.
Despite their strong cash flows, big dividends and safety, many utility stocks were left by the wayside during the pandemic. Investors clearly chose other sectors to get their safety fix. And now with the economy rebounding and vaccines available, investors are choosing growth over safety. For the utilities, this has created an interesting situation.
As one of the cheapest sectors in terms of valuation and highest yielding in the market, income seekers may have a real opportunity on their hands, especially considering the growth potential going forward.
Learn more about dividend investing here.
