Ed Butowsky Discusses Utility Stocks

I often think of utility stocks in the investment arena as the equivalent to penicillin in the medicine field. Generally speaking becoming a utility player will yield you "double play". While often times you receive a nice dividend you also stand the chance of capital appreciation. With interest rates on short term bonds and money market at historically low levels I believe buying utility stocks today and receiving a 3%-5% dividend is a smart decision.

During the liquidity crisis utility stocks went down, which was historically uncharacteristic. As you know the last thing people avoid paying during economic hardship are their electric and gas bills. Therefore I believe that most utility companies, if not all, will not go out of business. Since the low of the liquidity crisis large cap and small cap stocks have risen considerably, but utility stocks generally have been ignored. This leaves a great opportunity to invest in them immediately.

Between the income you receive and the potential growth I am looking for a 15% total return annually in this sector for the next two years. Specifical utility stocks I would buy are DPL Inc. (DPL), Great Plains Energy Inc. (GXP) and Exelon Corp. (EXC).

Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. You can view all of Ed's media releases on his website.