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The 10 Best Utility Stocks to Buy for 2019

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Utility stocks had a great 2018 … for the most part. Yes, the Utilities Select Sector SPDR (XLU) broadly finished the year with a marginal gain. But mounting U.S. and global worries helped push the sector to a spectacular 20% run between the February lows and the mid-December highs.

Heading into 2019, it looks as though utility stocks could be among the better performers this year, too, according to Goldman Sachs analysts.

“For equity investors, risk is high and the margin of safety is low because stock valuations are elevated compared with history,” Goldman Chief Equity Strategist David Kostin and team wrote in a Nov. 19 note to clients. “We forecast the S&P 500 index will generate a modest single-digit absolute return in 2019.”


Although the bank believes cash is an excellent place to allocate some of your capital in the year ahead, when it comes to actual stock picks, utilities are high on its list – so much so that it raised the sector to “overweight.” Why? Several analysts are predicting a slowdown in GDP growth in 2019, and historically, when that happens, utilities tend to outperform the markets as a whole, in part because the sector has traditionally had a low beta to the S&P 500.

Goldman also suggests that investors need to buy quality companies with stable earnings and revenues to prepare for the year ahead. Utilities fit that to a T, and typically deliver better-than-average dividend yield to boot. So with all that in mind, here are the 10 best utility stocks to buy for 2019.

SEE ALSO: 101 Best Dividend Stocks to Buy for 2019 and Beyond

Data is as of Jan. 21, 2019. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ opinions provided by Wall Street Journal.


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