Utilities have been among the worst performers for most of this bull market run. But for a month, the S&P Utilities Index has been outperforming the S&P 500.
Are utility stocks worth buying now? "Very much so," according to Paul Fremont, electric utility analyst at Jefferies and Co. He offered CNBC his industry insights and stock recommendations.
Fremont dichotomizes utilities into "regulated" and "commodity names." Right now, he favors the "regulated stories within the sector."
He has taken government action into account, seeing upward price pressures from Obama Adminstration initiatives to support cleaner energy, inclyding natural gas. But his view is more shaped by a "general outlook of supply and demand, both for power and for natural gas."
"Both of those look weak — and that's why we're favoring the regulated part of the sector."
"As to commodity names, we would not be investing in those now," Fremont said. He cited a recent, supposedly large U.S. natural gas find as a threat to certain firms with big proportions of their businesses in natgas.
"Companies like Exelon would suffer in a lower gas-price environment."
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Disclosure information was not available for Fremont or his company.