01-08-2015, 02:08 PM
Interestingly, this showed up in my inbox today. The 'Chart of the Day' from David Wilson from Bloomberg.
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Utility P/Es Nearing U.S. Highs Signal Caution: Chart of the Day
By David Wilson
(Bloomberg) -- Utility stocks have become too expensive in the U.S. after producing the biggest annual gain since 2000 for an industry gauge, according to John Stoltzfus, Oppenheimer & Co.’s chief market strategist.
The CHART OF THE DAY tracks the monthly performance and price-earnings ratio for the Standard & Poor’s 500 Utilities Index, according to data compiled by Bloomberg.
![[Image: utilities-index.jpg]](http://roadmap2retire.com/wp-content/uploads/2015/01/utilities-index.jpg)
Last year, utilities rose 24 percent to lead the S&P 500’s 10 main industry groups. The advance lifted the index as high as 19 times earnings, near peaks of 20.1 in 2000 and 19.2 in 2007, when the two previous U.S. bull markets ended.
“Future price gains would be much challenged” unless utility profit rises significantly, Stoltzfus wrote in a report three days ago with a similar chart. Earnings per share for the utility index increased 11 percent last year after falling the previous two years, based on Bloomberg’s figures.
Utilities are one of only three S&P 500 industry groups that rose during this year’s first four days of trading. They added 0.3 percent, which compared with a 1.8 percent increase for health-care companies and a 0.6 percent gain for makers of food, beverages and other consumer staples.
To be sure, dividend yields are higher than they were at earlier peaks. The S&P 500 utility index’s yield last week was no lower than 3.2 percent. It reached 2.74 percent in December 2007 and 2.63 percent in April 2001.
--
Utility P/Es Nearing U.S. Highs Signal Caution: Chart of the Day
By David Wilson
(Bloomberg) -- Utility stocks have become too expensive in the U.S. after producing the biggest annual gain since 2000 for an industry gauge, according to John Stoltzfus, Oppenheimer & Co.’s chief market strategist.
The CHART OF THE DAY tracks the monthly performance and price-earnings ratio for the Standard & Poor’s 500 Utilities Index, according to data compiled by Bloomberg.
Last year, utilities rose 24 percent to lead the S&P 500’s 10 main industry groups. The advance lifted the index as high as 19 times earnings, near peaks of 20.1 in 2000 and 19.2 in 2007, when the two previous U.S. bull markets ended.
“Future price gains would be much challenged” unless utility profit rises significantly, Stoltzfus wrote in a report three days ago with a similar chart. Earnings per share for the utility index increased 11 percent last year after falling the previous two years, based on Bloomberg’s figures.
Utilities are one of only three S&P 500 industry groups that rose during this year’s first four days of trading. They added 0.3 percent, which compared with a 1.8 percent increase for health-care companies and a 0.6 percent gain for makers of food, beverages and other consumer staples.
To be sure, dividend yields are higher than they were at earlier peaks. The S&P 500 utility index’s yield last week was no lower than 3.2 percent. It reached 2.74 percent in December 2007 and 2.63 percent in April 2001.