Utilities Have Rarely Been This Attractive

Like many of us, utilities were happy to say goodbye to 2020. They lost all of their early-year momentum when the pandemic hit and have yet to recover. Utilities closed 2020 as the second-worst-performing sector behind energy and remain down 10% from their peak last February. After record-high valuations in early 2020, the sector pullback means more attractive valuations going into this year. Healthy balance sheets, secure dividends, and growing earnings should give investors comfort that utilities can play their traditional defensive, income-producing role in 2021.