Franklin Templeton's Edward Perks has three favorite sectors: utilities, financial services and health technology. Co-portfolio manager of the $59 billion Franklin Income Fund, Perks joined "Closing Bell" to offer viewers his thoughts on utilities as a whole -- and to name individual stocks within the sector.
Perks' fund, rated five stars by Morningstar, has enjoyed a five-year average return of more than 12% under his stewardship. He told CNBC's Maria Bartiromo that its top sector holding, utilities, often gives nice dividends -- but he cautioned investors to examine the new, heterogenous nature of the utliity sector, which has evolved greatly in recent years.
Perks praised one holding, Public Service Enterprise Group (PSEG), for its "attractive dividend yield and growth," and added that it "taps into a number of themes" driving the sector: improving fundamentals and margins, and increasing demand for power. He also predicted more mergers and acquisitions in the sector, pointing to KKR's buyout offer for TXU.