Utility stocks have long been a staple of investment portfolios for stock market investors. This is because historically utility stocks have offered reliable income and modest growth potential. However, with rising interest rates expected to continue throughout the remainder of 2022, utility stocks may come under pressure.
This could present an opportunity for investors to buy top utility stocks at a discount. In general, utility stocks are sensitive to changes in interest rates, as higher rates can lead to lower valuations.
It may be worth considering some of the more defensive names in the sector. These companies tend to have strong balance sheets and dividend coverage ratios, which can help to protect against a decline in valuations. Though it’s important to note that utility stocks may not offer the same potential for capital appreciation as other sectors. However, they still offer an attractive income stream for investors who are willing to accept a higher level of risk.
With this in mind, here are four trending utility stocks to watch for your long-term portfolio.
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