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What's in Store for Utilities ETFs This Earnings Season?
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Big utilities companies will start releasing their quarterly numbers in the coming days. The outlook is mixed this time. Let’s delve into the earnings potential of the big utilities companies that could regulate the performance of the sector ahead.
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Inside Our Surprise Prediction
Dominion Energy (D - Free Report) is likely to report on Nov 4, 2022. D has a Zacks Rank #3 and an Earnings ESP of -0.23%.
NextEra Energy (NEE - Free Report) is likely to report on Oct 28, 2022. NEE has a Zacks Rank #2 and an Earnings ESP of +1.91%.
Duke Energy (DUK - Free Report) is likely to report on Nov 4, 2022. DUK has a Zacks Rank #4 and an Earnings ESP of -0.64%.
What’s in Store This Earnings Season?
As discussed above, the chances of a broad-based earnings beat are lower. This has been reflected in the latest earnings estimates too, with Duke Energy’s current quarter EPS estimate of $1.83 falling from $1.85 seven days back and $1.86 one month ago.
The current-quarter EPS expectation for NextEra Energy has fallen from $0.76 three months ago to $0.79 now. It was $0.77 one month ago. Dominion Energy’s current-quarter expectation of $1.08 has gone down from $1.09 in the past seven days.
Utility ETFs in Focus
Hence, investors pinning hopes on an upbeat earnings season must be keen on knowing how utilities ETFs are placed before their earnings releases.
The Utilities Select Sector SPDR Fund (XLU - Free Report)
The fund tracks the Utilities Select Sector Index. It comprises 29 holdings, with the above-mentioned companies carrying about 30% weight. Its AUM is $14.60 billion and expense ratio is 0.10%. It carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. XLU is down 1.2%.
The fund tracks the MSCI US Investable Market Utilities 25/50 Index and includes stocks of companies that distribute electricity, water, or gas or that operate as independent power producers. It comprises about 60 holdings, with the above-mentioned companies constituting 26.5%. Its AUM is $5.04 billion and expense ratio is 0.10%. It yields 3.22% annually. It carries a Zacks ETF Rank #3, with a Medium-risk outlook. The fund is off 1.2% past year.
The fund tracks the Russell 1000 Utilities RIC 22.5/45 Capped Index, providing exposure to U.S. companies that supply electricity, gas and water. It comprises 44 holdings, with the above-mentioned companies constituting 26%. Its AUM is $949.6 million and expense ratio is 0.39%. The fund carries a Zacks ETF Rank of 2, with a Medium-risk outlook. The fund is off 1.2% past year.
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What's in Store for Utilities ETFs This Earnings Season?
Big utilities companies will start releasing their quarterly numbers in the coming days. The outlook is mixed this time. Let’s delve into the earnings potential of the big utilities companies that could regulate the performance of the sector ahead.
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Inside Our Surprise Prediction
Dominion Energy (D - Free Report) is likely to report on Nov 4, 2022. D has a Zacks Rank #3 and an Earnings ESP of -0.23%.
NextEra Energy (NEE - Free Report) is likely to report on Oct 28, 2022. NEE has a Zacks Rank #2 and an Earnings ESP of +1.91%.
Duke Energy (DUK - Free Report) is likely to report on Nov 4, 2022. DUK has a Zacks Rank #4 and an Earnings ESP of -0.64%.
What’s in Store This Earnings Season?
As discussed above, the chances of a broad-based earnings beat are lower. This has been reflected in the latest earnings estimates too, with Duke Energy’s current quarter EPS estimate of $1.83 falling from $1.85 seven days back and $1.86 one month ago.
The current-quarter EPS expectation for NextEra Energy has fallen from $0.76 three months ago to $0.79 now. It was $0.77 one month ago. Dominion Energy’s current-quarter expectation of $1.08 has gone down from $1.09 in the past seven days.
Utility ETFs in Focus
Hence, investors pinning hopes on an upbeat earnings season must be keen on knowing how utilities ETFs are placed before their earnings releases.
The Utilities Select Sector SPDR Fund (XLU - Free Report)
The fund tracks the Utilities Select Sector Index. It comprises 29 holdings, with the above-mentioned companies carrying about 30% weight. Its AUM is $14.60 billion and expense ratio is 0.10%. It carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. XLU is down 1.2%.
Vanguard Utilities ETF (VPU - Free Report)
The fund tracks the MSCI US Investable Market Utilities 25/50 Index and includes stocks of companies that distribute electricity, water, or gas or that operate as independent power producers. It comprises about 60 holdings, with the above-mentioned companies constituting 26.5%. Its AUM is $5.04 billion and expense ratio is 0.10%. It yields 3.22% annually. It carries a Zacks ETF Rank #3, with a Medium-risk outlook. The fund is off 1.2% past year.
iShares U.S. Utilities ETF (IDU - Free Report)
The fund tracks the Russell 1000 Utilities RIC 22.5/45 Capped Index, providing exposure to U.S. companies that supply electricity, gas and water. It comprises 44 holdings, with the above-mentioned companies constituting 26%. Its AUM is $949.6 million and expense ratio is 0.39%. The fund carries a Zacks ETF Rank of 2, with a Medium-risk outlook. The fund is off 1.2% past year.