You Don't Have to Pick a Winner in Utilities. Here's Why.
Traditionally speaking, utilities were once known as "widows and orphans" stocks -- low-volatility stocks that are generally mature and pay a dividend. The theory was that their regulated nature and generally strong dividends generally provided reasonable and fairly reliable returns with what seemed like less risk than many other stock types.
These days, while utilities as a group may still retain some of those characteristics, individual utilities themselves can be much riskier. Pacific Gas & Electric was forced into bankruptcy reorganization, for instance, due to its role in California wildfires. Likewise, Hawaiian Electric Industries is under pressure due to what may have been its role in the recent Maui wildfires.
Add the massive investments that many will have to make to prepare for tougher rules on carbon emissions, and it's now much harder than it used to be to pick solid utility stocks. Fortunately, you don't have to pick a winner in utilities to get a shot at a decent return from investing in them. This is because there are now low-cost exchange-traded funds (ETFs) that let you buy a broad basket of utility companies in one transaction.
Source Fool.com
