More & more EVs are being sold. More & more charging stations are being constructed And more and more people are installing 240 charging ports in their garages. Electric use will rise. Electric utilities are transitioning to green energy electric production. And electric storage battery stations are being built by electric utilities. And lastly utilities pay a decent dividend and have less stock price volatility.
For a lazy person like my self an ETF would be the preferred choice. Now obviously this would be a conservative investment. A $10,000 in the Vanguard Utilities ETF VPU would now be worth $28,109 with a 3.09% dividend yield and a beta of .55.
I personally own the Vanguard Consumer Staples ETF VDC. that has a 2.3% dividend yield and a beta of .63. A $10,000 investment would now be worth $28.450 after 10 years.
As I am a 72 year old geezer these offerings have some appeal especially as we near a recession.
I am also currently still invested in Vanguard Information Technology ETF VGT . .78% dividend yield and a beta of 1.27. And even with a nearly 30% haircut in 2022 would have returned $59,025 on a 10 year $10,000 investment.
In the short term, it should be pointed out that utility stocks usually don’t do very well in a rising interest rate environment. Of course, there are always exceptions, but that is just a general rule.
Which do you prefer, high divis, or high cap gains?
My best gainer, of a handful of electric utilities, has been NexEra Energy, (NEE) parent of Florida Power & Light. Yield is only a bit over 2%, but total cap gain since my entry in December 2016 is 177%, according to Quicken.
I not Wendy but I find as I age I am more interested in “Steady Eddies” rather than knocking the ball out of the park.
As I mentioned in OP I have some Vanguard Information Technology ETF VGT but am no longer adding to that ETF. Any new money I accumulate has been going into Vanguard Dividend Appreciation ETF VIG-1.89% dividend yield-.84 beta or Vanguard Consumer Staples ETF VDC. And I now plan to start a position in Vanguard Utilities ETF VPU. My volatility tolerance has declined significantly. YMMV
A missing bit of information: Electric utilities used to have a near monopoly on electric generation. With wind and solar farms and home generation that monopoly is weakening. Electric utilities will continue to own and operate the macro grids but micro grids are popping up everywhere. Electric utilities will be morphing from providers to brokers.
I’m not predicting outcome but we should consider these developments. Consider what happened to telephony when Judge Greene broke up Ma Bell. I remember well because I made a huge investing mistake. As the process was finalizing our AT&T shares were going to be converted to shares of the newly created, divested companies. One got a choice about the distribution. I figured the hub was the most productive part so I chose to hold AT&T shares. The spun off service providers would have been a much, much better choice.
One more thing to consider is dividend growth rate, for example the 5 year dividend CAGR. It is possible to currently build a utilities portfolio with a yield between 4-5%, beta less than 1, and have a dividend CAGR that matches/beats inflation. This link is a good resource.