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4 Utility Stocks to Buy as Consumer Confidence Sinks to 12-Year Low
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U.S. consumers aren’t too confident about the economy’s health. Fresh data showed that consumer confidence declined further in March.
Uncertainty over the impact of President Donald Trump’s tariffs in the near term and inflation are denting investors’ confidence. This has seen major indexes suffering over the past month, with the S&P 500 and the Nasdaq entering correction territory. Although the indexes recovered some of the losses in the past few sessions, volatility continues in markets.
Moreover, the stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high-dividend yield and a favorable Zacks Rank.
Consumer Confidence Sinks Further
The Conference Board reported on Tuesday that consumer confidence fell to 92.9 in March, declining 7.2 points from the previous month and missing the consensus estimate of a reading of 93.5.
The Expectations Index, a gauge of the consumers' short-term outlook for income, business, and labor market conditions, took a massive hit, falling 9.6 points to hit 65.2, its lowest reading in 12 years. Any reading below 80 is considered a signal for recession in the coming days.
Trade War Fears, Inflation Denting Consumer Confidence
Inflation declined marginally in February but remains stubbornly higher than the Federal Reserve’s 2% target. The Fed cut interest rates by 100 basis points between September and December 2024 after inflation showed signs of a sharp decline. However, a rise in the final months of 2024 saw the Federal Reserve adopt a cautious approach and halt interest rate cuts since January.
The recent decline in consumer confidence comes with growing uncertainty over how Trump’s tariff plans will impact the economy. Trump has announced hefty tariffs on several countries, including the United States’ biggest trade partners, Canada, Mexico and China.
Trump announced 25% tariffs on imports from Canada and Mexico, which after a month’s delay will go into effect on April 2. Also, hefty tariffs have been imposed on China. Consumers believe that retaliatory tariffs from these countries will further weigh on the nation’s economy and push it into inflation. These worries have been denting investors’ confidence, taking a toll on stocks.
4 Low-Beta Utilities Stocks With Upside
Avista Corporation
Avista Corporation is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is its operating division that provides electric service customers and natural gas customers. AVA’s service territory covers eastern Washington, northern Idaho and parts of southern and eastern Oregon.
Avista Corporation’s expected earnings growth rate for the current year is 14%. The Zacks Consensus Estimate for the current-year earnings has improved 3.6% over the past 60 days. AVA currently has a Zacks Rank #1. Avista Corporation has a beta of 0.46 and a current dividend yield of 4.94%.
CMS Energy Corporation
CMS Energy Corporation is an energy company. CMS is the parent holding company of Consumers, an electric and gas utility, and NorthStar Clean Energy, a primarily domestic independent power producer and marketer.
CMS Energy Corporation has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CMS currently carries a Zacks Rank #2. CMS Energy Corporation has a beta of 0.35 and a current dividend yield of 2.97%.
NiSource Inc.
NiSource Inc., together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.
NiSource has an expected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.50 and a current dividend yield of 2.81%.
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. is a domestic energy delivery company that provides electric transmission & distribution, natural gas distribution and competitive natural gas sales and services operations. CNP maintains the wires, poles and electric infrastructure serving more than 2.5 million metered customers in the greater Houston area and southwestern Indiana.
CenterPoint Energy has an expected earnings growth rate of 8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. CNP currently has a Zacks Rank #2. CenterPoint Energy has a beta of 0.91 and a current dividend yield of 2.46%.
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4 Utility Stocks to Buy as Consumer Confidence Sinks to 12-Year Low
U.S. consumers aren’t too confident about the economy’s health. Fresh data showed that consumer confidence declined further in March.
Uncertainty over the impact of President Donald Trump’s tariffs in the near term and inflation are denting investors’ confidence. This has seen major indexes suffering over the past month, with the S&P 500 and the Nasdaq entering correction territory. Although the indexes recovered some of the losses in the past few sessions, volatility continues in markets.
Given this situation, it would be safe to invest in utility stocks, which are considered defensive. In this regard, Avista Corporation (AVA - Free Report) , CMS Energy Corporation (CMS - Free Report) , NiSource Inc. (NI - Free Report) , CenterPoint Energy, Inc. (CNP - Free Report) are good picks. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Moreover, the stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high-dividend yield and a favorable Zacks Rank.
Consumer Confidence Sinks Further
The Conference Board reported on Tuesday that consumer confidence fell to 92.9 in March, declining 7.2 points from the previous month and missing the consensus estimate of a reading of 93.5.
The Expectations Index, a gauge of the consumers' short-term outlook for income, business, and labor market conditions, took a massive hit, falling 9.6 points to hit 65.2, its lowest reading in 12 years. Any reading below 80 is considered a signal for recession in the coming days.
Trade War Fears, Inflation Denting Consumer Confidence
Inflation declined marginally in February but remains stubbornly higher than the Federal Reserve’s 2% target. The Fed cut interest rates by 100 basis points between September and December 2024 after inflation showed signs of a sharp decline. However, a rise in the final months of 2024 saw the Federal Reserve adopt a cautious approach and halt interest rate cuts since January.
The recent decline in consumer confidence comes with growing uncertainty over how Trump’s tariff plans will impact the economy. Trump has announced hefty tariffs on several countries, including the United States’ biggest trade partners, Canada, Mexico and China.
Trump announced 25% tariffs on imports from Canada and Mexico, which after a month’s delay will go into effect on April 2. Also, hefty tariffs have been imposed on China. Consumers believe that retaliatory tariffs from these countries will further weigh on the nation’s economy and push it into inflation. These worries have been denting investors’ confidence, taking a toll on stocks.
4 Low-Beta Utilities Stocks With Upside
Avista Corporation
Avista Corporation is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is its operating division that provides electric service customers and natural gas customers. AVA’s service territory covers eastern Washington, northern Idaho and parts of southern and eastern Oregon.
Avista Corporation’s expected earnings growth rate for the current year is 14%. The Zacks Consensus Estimate for the current-year earnings has improved 3.6% over the past 60 days. AVA currently has a Zacks Rank #1. Avista Corporation has a beta of 0.46 and a current dividend yield of 4.94%.
CMS Energy Corporation
CMS Energy Corporation is an energy company. CMS is the parent holding company of Consumers, an electric and gas utility, and NorthStar Clean Energy, a primarily domestic independent power producer and marketer.
CMS Energy Corporation has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CMS currently carries a Zacks Rank #2. CMS Energy Corporation has a beta of 0.35 and a current dividend yield of 2.97%.
NiSource Inc.
NiSource Inc., together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.
NiSource has an expected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.50 and a current dividend yield of 2.81%.
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. is a domestic energy delivery company that provides electric transmission & distribution, natural gas distribution and competitive natural gas sales and services operations. CNP maintains the wires, poles and electric infrastructure serving more than 2.5 million metered customers in the greater Houston area and southwestern Indiana.
CenterPoint Energy has an expected earnings growth rate of 8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. CNP currently has a Zacks Rank #2. CenterPoint Energy has a beta of 0.91 and a current dividend yield of 2.46%.