Utilities have a long history of being a safe haven – especially for yield hungry income investors. This is sill true today with weaker consumer spending in the U.S. and lower global output depressing stock prices, and the government debt snowballing to historic amounts pushing the yield on treasuries downward.

Here’s 5 quick reasons utilities look really good right now:

1. Regulated utilities have built-in profit margins.
2. They have predictable dividends.
3. They usually reduce a portfolio’s beta.
4. The current utility ETF’s are yielding more than long-term treasuries, which suggests that they are oversold relative to treasuries.
5. You can own a diversified basket of utilities in the Utilities Sector SPDR ( XLU) and Vanguard’s Utilities ( VPU) ETF’s.

Here’s a chart showing the divergence of the XLU ETF from treasuries (IEF) and equities (SPY):

… And some stats on the ETF’s;

XLU.

yield: 4.66%
P/E: 10.64
Total Expense Ratio: 0.22%
Annual Holdings Turnover: 4%
Total Net Assets: 1.94B

VPU.

Yield: 4.33%
P/E: 10.62
Total Expense Ratio: 0.2%
Annual Holdings Turnover: 23%
Total Net Assets: 320.65M

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