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Three High Yield Utilities You Might Want to Exit Now (But Buy Later) [UPDATE]


Is it now time to deploy capital in these names?

MINYANVILLE ORIGINAL We wanted to look back at an article we wrote on August 8 titled High Yield Utilities You Might Want to Exit Now (But Buy Later). We recommended selling Duke Energy (DUK), Exelon (EXC), and Southern Company (SO) and looking for a better entry point in these names. We were getting an overbought reading in utilities. We cited that we felt quality dividend names were approaching frothy levels. We proved to be right: If you held onto these names and were equally weighted in these names you would be down -3.5% vs. the S&P 500 (^GSPC) being flat. Chasing yield without being aware of principal is a false promise for safely.

So are we ready to deploy capital to these names? We would be looking for the S&P 500 to test 1,390 and preferably have a weekly close above this level before allocating to these names and other high yielding dividend stocks. As you can see below, the sector rating has pulled back from a Strong Buy to a Hold.

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