Utilities Or Refineries? Sell One, Buy The Other

Posted by Brett Owens - Contrarian Outlook

Share on Facebook

Tweet on Twitter


I want to talk about a corner of the market that has been overlooked for far too long despite offering sustainable high yields of 4% or more—with dividends primed to soar even more.

This sector is a distant cousin to a more familiar group of stocks: utilities. Utility stocks were once Wall Street’s best kept secret: high dividends, cheap valuations, sustainable business models, and steady revenues were all reasons why many big investors quietly bought these small regional companies. Sadly, the cat’s out of the bag. Utility stocks are up nearly 14% year-to-date as investors pile into the sector:

Utilities Gone Haywire



Just look at the performance of the SPDR Utility ETF (XLU), which is up massively even after a recent correction from its shocking 22% year-to-date return earlier this summer. But notice the other line in that chart—that’s the VanEck Vectors Oil Refiners ETF (CRAK), a new and tiny ETF that tracks the oil refineries sector. This ETF is new and tiny for one simple reason: the market has ignored refineries even as it has a love affair with utilities..…continue reading HERE

…also Michael Campbell on – The Formula For Social Unrest & Political Upheaval