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Buy Utilities Stocks for Uncertain Times: Analysts

Thursday, 18 Aug 2011 | 1:20 PM ET
Electricity pylon pass the Ffos-Y-Fran opencast coal mine in Merthyr Tydfil, Wales.
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Electricity pylon pass the Ffos-Y-Fran opencast coal mine in Merthyr Tydfil, Wales.

Stocks of high-yield, dividend-paying electric utility companies can brighten an investor's portfolio when markets are volatile.

David Burks, vice president and senior analyst at Hilliard Lyons, likes electric utilities because they offer attractive yields averaging 4.7 percent. Moreover, he said, "the companies offer potential for dividend growth and defense appeal, as well."

Burks' favorites include Southern Co. , American Electric, CMS Energy and Nextera Energy .

Paul Fremont, managing director of equity research at Jefferies & Co., said power markets are "well positioned to recover from very depressed levels over the past two years." His picks include Constellation Energy , Calpine and especially Exelon , which he said has provided investors with a 5 percent yield.

Click here for what Burks thought of utilities during July's heat wave.

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Disclosures:

Neither David Burks nor Paul Fremont or their companies own shares of the companies mentioned.

Disclaimer

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