A Solid First Quarter

This month’s update to the Utility Report Card includes our analysis of first-quarter earnings and guidance for more than 200 essential-service stocks, while the feature article delves into some of the key trends that emerged during this exhaustive process.

With utility stocks still trading at elevated valuations, our investment strategy hasn’t changed appreciably; investors should remain disciplined and avoid chasing stocks beyond our value-based buy targets.

At the same time, solid first-quarter results underscore the strong fundamentals that should drive above-average earnings and dividend growth for our favorite utility stocks.

Sentiment toward utility stocks remains bullish. NextEra Energy’s (NYSE: NEE) share price rallied to a new all-time high, despite the Public Utility Commission of Texas rejecting its proposed purchase of Oncor Electric Delivery—the company’s second deal failure in two years.

But high valuations create lofty expectations, increasing the likelihood that investors will view any hiccup, real or imagined, as an excuse to take profits.