I hate saying it.
But markets are an absolute disaster.
With Russia’s invasion of Ukraine, inflationary threats, a potential recession, and likely interest rate hikes on the way, investors are terrified. Plus, with oil prices now above $110 a barrel, there are concerns pump prices could substantially curb consumer spending.
“History shows that a 100% increase in oil prices over a year usually triggers a recession (1990, 2000, 2008). We’re not quite there yet, but we are getting closer by the day,” Nicholas Colas, co-founder of DataTrek Research said, as quoted by Barron’s.
And unfortunately, no one is quite sure what comes next.
While it would be easy to run for the exits, sit tight, and protect your portfolio until the tension fades. The last thing you want to do is run from markets that are historically resilient.
Instead, simply buy utility stocks like NextEra Energy (NEE).
That’s “because of the sector’s traditional defensive nature and steady revenues–after all, people need water, gas, and electric services during all phases of the business cycle, including during recessions,” reports OilPrice.com.
NEE provides a basic need service –electricity. Plus, since demand for electricity doesn’t change a lot from one year to the next, the company is insulated. Two, the company has generated a positive total for investors in 19 of the last 20 years. Three, the company carries a dividend yield of 2.12%. In addition, according to the company:
“The board of directors of NextEra Energy declared a regular quarterly common stock dividend of $0.425, an approximate 10% increase versus the prior-year comparable quarterly dividend. This increase is consistent with the plan announced in 2020 of targeting roughly 10% annual growth in dividends per share through at least 2022, off a 2020 base. The dividend is payable on March 15, 2022, to shareholders of record on March 1, 2022.”
Analysts seem to like the NEE stock, too. BMO Capital analysts for example raised their price target on NEE to $98 from $89 with an outperform rating on the stock.
