Utility stocks set another series of records last month. As a result, price/earnings multiples are again moving toward the stratosphere. Meanwhile, dividend yields are scraping lows last seen immediately prior to the big declines of 2001-02 and 2008-09.
All-American revenues, high and growing dividends, a well-earned reputation for resisting recessions, takeover speculation and excitement about renewable energy and 5-G growth have all contributed to the rise. The good news is all of these factors are likely to be even more important to investors when the bull market that began way back in 2009 finally does come to an end.
Even that may not be enough to offset a rush of money out of stocks in general. And as we’ve seen from the market action this summer, there’s a fair amount of cash sloshing in and out of the sector depending on what happens to Treasury bond yields.
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