After Reaching a 3-Year Low, This High-Yield ETF Is Up 12.8%. Here's Why It's a Buy Now.
Utilities are known for being low-growth, stable cash cows with predictable revenue streams. The business model is ideally suited for supporting dividend growth and recession resistance.
But utilities depend on debt financing to maintain existing assets and build new infrastructure projects. Debt has gotten more expensive as inflationary pressures are taking a particularly high toll on utility businesses.
The Utilities Select Sector SPDR Fund (NYSEMKT: XLU) is down over 12% year to date versus an 18% gain for the S&P 500. However, it's up nearly 13% from its early October low. Here's why the exchange-traded fund (ETF) may have bottomed and could be worth buying now.
Source Fool.com
