Maximum drawdown stock screener12/29/2023 ![]() To learn more, read How Much Cash Should I have in my Portfolio?. Aggressive investors should keep a small position in utilities instead of holding a cash position. ![]() Utilities are also great for new investors because they provide dividend income while also having low volatility.įor more information, see the Top Stock for New Investorsįor advanced investors, choose a percentage based on your investment strategy. Utilities are great for new investors because a utility is a recognizable brand with an easy-to-understand business. Ideally, an investor has a position in the utility service they use. What percentage of my portfolio should be utilities?įor a new investor, utilities should make up 10% to 15% of your portfolio. The behavior of the market is evolving as more algorithmic trading occurs. If this happens, its typically a good time to reduce your position in utilities and find under-valued opportunities in other sectors. This will cause an increase demand for utilities. During market corrections, investors typically flee to utilities. Utilities can provide a gauge of market over-exuberance if they are significantly under-valued. Its best to accumulate utilities when the stock market is hot. Utilities provide income through dividends and lowers the overall risk of a portfolio. Most investors should always have a position in utilities. For more information, see Top Utility Stocks. Utilities are companies who provide electric power, natural gas, or water to businesses, governments, and residential buildings. Consider using a beta of 0.50 to 1.00ĭetailed filter on What are utility stocks? Since you want little price movement, your beta should be low. Beta is a way of measuring price movement versus the overall market.A utility with negative earnings should be ignored. Any utility with a P/E ratio above 20 should be filtered out. Price-to-earnings Ratio – A utility stock should have price and earnings stability.Stable utilities have a dividend policy that keeps payout ratios around 30% to 50% Dividend Payout Ratio – This should be low.Your annual yield should be greater than 1.50% Be sure you keep intermediate dividend percentages as well. Dividend Percentage – Don’t just choose the highest yield.When searching for the right utility stock, use the following filters:
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