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Utilities Stocks Tend to 'Sizzle' In the Summertime

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Utilities Stocks Tend to 'Sizzle' In the Summertime

Investors looking to allocate some of their investment dollars to a sector that typically outperforms others in the summer should consider utilities, at least according to CNBC's Landon Dowdy.

Dowdy detailed on Thursday some of the top performing sectors during the summer months.

According to Dowdy, the utilities sector has been among the top performing sectors once spring comes to an end and has historically outperformed telecom, technology and consumer staples stocks over the past six summers.

Some of the top performing names in the sector include AGL Resources Inc. (NYSE: GAS) (recently acquired by Southern Co (NYSE: SO)), American Water Works Company Inc (NYSE: AWK) and Edison International (NYSE: EIX) with an average return of 5.18 percent, 5.92 percent and 3.76 percent, respectively over the past six summer months.

Dowdy also pointed out that shares of American Water Works has returned nearly 300 percent over the past six years.

Dowdy added that investors are attracted to these "sizzling" stocks because of their high paying dividends in the current low yield environment.

Not So Sizzling After All?

CXO Advisory explored the other side of the trade back in early June.

Related Link: The Utilities Sector Gets A Lot More Volatile In The Summer

According to data collected by CXO Advisory, the utility sector is actually highly volatile in the summer months. The Utilities SPDR (ETF) (NYSE: XLU) has proven to be the best performing sector ETF throughout June, August and September, but the second worst performing sector ETF throughout July.

CXO Advisory's data extend back to when the sector ETF was launched in 1999, while Dowdy's data extend back to just 2010.

Latest Ratings for AWK

DateFirmActionFromTo
Oct 2019MaintainsOutperform
Aug 2019MaintainsMarket Perform
Jul 2019DowngradesNeutralUnderperform

View More Analyst Ratings for AWK
View the Latest Analyst Ratings

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