03-27-2021, 12:00 PM
(03-27-2021, 09:35 AM)EricL Wrote: XLU is a nice option for utilities if you can't decide which individual one to buy. Yield may be a touch lower, but it's performed as well as my individual ute picks over the years.Nothing at all wrong with XLU dividend, and you'll have added safety. I will point out why XLU has done better than most individual UTEs though. Look at XLU holdings. It is overweight NEE and held plenty of XEL over the years when it was running. Market darling NEE scares me bad during the next real market downturn because the BIZ performance numbers don't match the software stock PE anymore, but it is still one of my largest positions for now. XLU was riding on the back of XEL some too over the last 20+ years. ED and DUK etc assist the XLU dividend.
Anyone considering an individual UTE should spend 10 minutes on the following DD. Pull up an XLU graph. I enjoyed the 20 year ride but that's irrelevant now. It's history and the industry is changing. Grab a 5 year graph because the transition is in progress for several years now. Throw up the following as a comparison vs XLU. NEE-XEL-ED-DUK for total return. Check some others if you like. It's all I need to see. The 4% Div UTE gets swallowed up in a matter of months after purchase by the the ones with some vision. I make as much money trading WEC and ALE but that's more complicated. It's my opinion they will outperform NEE, XEL and DUK over the next three years but there is no assurance the market will acknowledge better growth. I own them all just to be safe.
Somebody want to make this a non utility thread?