The Utilities Sector Is Heating Up—Don't Miss the Breakout
After spending much of the year quietly consolidating, the utilities sector is beginning to show signs of strength. While growth and tech stocks have dominated the spotlight in 2025, utilities have steadily gained traction beneath the surface.
XLU: Break Out Alert
XLU offers a low-cost, simple way to invest in utilities, with a growing dividend and a bullish technical setup for a breakout. Major catalysts include aggressive deregulation and surging electricity demand driven by EVs and data centers, setting up strong earnings growth. The chart shows repeated resistance tests and higher lows, suggesting XLU could rally to $100 by 2026 if catalysts play out.
Should You Invest in the Utilities Select Sector SPDR ETF (XLU)?
Launched on 12/16/1998, the Utilities Select Sector SPDR ETF (XLU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.
XLU: The Utilities Sector Offers A Great Long-Term Opportunity
The utilities sector is entering an early-stage growth cycle, fueled by surging electricity demand from data centers, EVs, and industrial expansion. Massive capital investments by leading utilities signal confidence in sustained demand, positioning the sector for robust earnings and dividend growth. The Utilities Select Sector SPDR® Fund ETF (XLU) offers diversified, low-cost exposure to top utilities, with strong liquidity and a 2.7% dividend yield.
NextEra Energy Vs. XLU: Yield Spread Favors Buying NEE
Since my last writing, the XLU-NEE yield spread has plunged to the lowest level in at least a decade. This indicates that NEE's valuation risk is extremely low compared to the broader utility sector. I am optimistic for NEE to sustain ~10% annual dividend growth rate given its past dividend growth record and the guidance provided in its Q1 earnings report.
Should You Invest in the Utilities Select Sector SPDR ETF (XLU)?
Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the Utilities Select Sector SPDR ETF (XLU), a passively managed exchange traded fund launched on 12/16/1998.
XLU: Safe Haven Assets Could Prove Even More Attractive (Rating Upgrade)
Utilities Select Sector SPDR Fund ETF is holding ground amid the tariff-induced market volatility. The growth of data centers energy consumption and capital investments provides a favorable background for profits in the utility sector. XLU offers an attractive dividend yield, which, along with the estimated upside, could deliver up to a 20% total return 12 months ahead.
Top Utility Stocks Powering Through Volatility
As U.S. equities have pulled back sharply year-to-date (YTD), the benchmark S&P 500 ETF NYSEARCA: SPY has fallen nearly 8% from its 52-week highs. However, specific sectors have held up better than others during this market turmoil.
XLU: Utilities Offer Defensive Potential Against Slowing Economy And Resurgent Inflation (Rating Upgrade)
My outlook on utility funds has improved due to the sector's high correlation to gold, driven by an inherent hedge against a potential rise in inflation. Abnormally high utility stock valuations may be justified if utility stocks are the only sector with both low cyclical risk and positive inflation exposure. Although inflation may slow with the economy, the state of the fiscal budget and debt points to an inevitable significant and sustained inflation wave over the next decade.
Should You Invest in the Utilities Select Sector SPDR ETF (XLU)?
If you're interested in broad exposure to the Utilities - Broad segment of the equity market, look no further than the Utilities Select Sector SPDR ETF (XLU), a passively managed exchange traded fund launched on 12/16/1998.
Sector Rotation: Are Utilities Gaining as Financials Weaken?
One of the top-performing sectors YTD has been financials, with the popular financial ETF, Financial Select Sector SPDR NYSEARCA: XLF, already up 6.5% as of Friday's close. Conversely, one of the sectors that outperformed for the first three quarters of last year, utilities, represented by the Utilities Select Sector SPDR ETF NYSEARCA: XLU, has lagged financials and performed in line with the benchmark S&P 500.
Power Outage: Utilities (XLU) Lag Stock Indices Over Past 27 Months
Today we provide a quick update on three key components to Dow Theory, looking at the performance of the Dow Jones Industrial Average, Dow Jones Transportation Average and the Utilities Sector ETF (XLU). More specifically, we look at performance over the past 27-months.
