XLU Stock Recent News

The utility sector was one of the worst-performing sectors in 2023, with a return of -10% compared to the S&P 500's +24% return. However, the sector closed the year strong, climbing 13% in the last three months. The prospects for the utility sector in 2024 are looking more positive, as the Federal Reserve indicated potential rate cuts, which could attract income investors back to utility stocks.

Utilities could be an enticing value play in 2024, with the XLU offering a 3.32% yield. XLU has significantly trailed the market in the past year, but its top-10 holdings have double-digit EPS growth projections. XLU could become a proxy for yield and modest growth as capital flows back into the market, and its dividend growth adds to its appeal.

The Utilities Sector (XLU) doesn't get a lot of headlines. In fact, many investors don't even pay attention to it.

The Utilities Select Sector SPDR ETF is a well-diversified utilities-focused ETF that provides exposure to various themes within the sector. XLU is considered a defensive setup with a relatively attractive dividend yield compared to the S&P 500. I explain why XLU has likely bottomed in October, as it reached significant pessimism, as the 10Y yield broke above 5%.

A highly regarded billionaire investor recently voiced a bearish outlook on the magnificent seven and market cap-weighted ETFs like SPY and VOO that hold them. Instead, he believes that diversification into more defensive and increasing relative exposure to smaller-sized companies makes sense right now. We share why we think that XLU is a very attractive pick instead of the magnificent seven right now.

With Warren Buffett's Berkshire Hathaway increasing its cash reserves and Deutsche Bank forecasting a likely mild recession in the first half of 2024, look into ETFs to hedge against economic downturn.

Launched on 12/16/1998, the Utilities Select Sector SPDR ETF (XLU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.

Demand for new infrastructure makes the utility sector capital intensive. At the same time, the sector is also facing a higher cost of capital.

Cooling inflation triggered the possibility of a less-hawkish Fed, going forward.

Utilities sector is no longer boring, predictable, or safe due to climate change and energy transition. Utility stocks still have room for a price correction to meet risk-free rates. XLU ETF portfolio is trading at a high P/E ratio and has escalating debt risks, making it a sell recommendation.