One of the biggest mistakes investors make with utilities is chasing yield while ignoring durability.
A high yield can look attractive for a quarter or two, but over a full market cycle, the utilities that consistently outperform are usually the ones that combine three characteristics: stable cash flow, constructive regulation, and disciplined capital allocation
In today’s market, where artificial intelligence, electrification, grid modernization, and industrial reshoring are all increasing power demand, the utilities with the strongest underlying business models may be entering one of the best long-term environments the sector has seen in years.
Here are five utility companies that embody many of the same characteristics we look for.
This post originally appeared at Investing Dailly.