Index Investing News
Saturday, May 31, 2025
No Result
View All Result
  • Login
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
No Result
View All Result
Index Investing News
No Result
View All Result

FUTY: Utilities Dashboard For December (NYSEARCA:FUTY)

by Index Investing News
December 20, 2022
in Stocks
Reading Time: 8 mins read
A A
2
Home Stocks
Share on FacebookShare on Twitter


Pavel Vozmischev

This monthly article series shows a dashboard with aggregate industry metrics in utilities. It is also a top-down analysis of sector ETFs like the Utilities Select Sector SPDR ETF (XLU) and the Fidelity MSCI Utilities Index ETF (NYSEARCA:FUTY), whose largest holdings are used to calculate these metrics.

Shortcut

The next two paragraphs in italic describe the dashboard methodology. They are necessary for new readers to understand the metrics. If you are used to this series or if you are short of time, you can skip them and go to the charts.

Base Metrics

I calculate the median value of five fundamental ratios for each industry: Earnings Yield (“EY”), Sales Yield (“SY”), Free Cash Flow Yield (“FY”), Return on Equity (“ROE”), Gross Margin (“GM”). The reference universe includes large companies in the U.S. stock market. The five base metrics are calculated on trailing 12 months. For all of them, higher is better. EY, SY and FY are medians of the inverse of Price/Earnings, Price/Sales and Price/Free Cash Flow. They are better for statistical studies than price-to-something ratios, which are unusable or non available when the “something” is close to zero or negative (for example, companies with negative earnings). I also look at two momentum metrics for each group: the median monthly return (RetM) and the median annual return (RetY).

I prefer medians to averages because a median splits a set into a good half and a bad half. A capital-weighted average is skewed by extreme values and the largest companies. My metrics are designed for stock-picking rather than index investing.

Value and Quality Scores

I calculate historical baselines for all metrics. They are noted respectively EYh, SYh, FYh, ROEh, GMh, and they are calculated as the averages on a look-back period of 11 years. For example, the value of EYh for hardware in the table below is the 11-year average of the median Earnings Yield in hardware companies.

The Value Score (“VS”) is defined as the average difference in % between two valuation ratios (EY, SY) and their baselines (EYh, SYh). FY is reported for consistency with other sector dashboards, but it is ignored in utilities‘ score to avoid some inconsistencies. In the same way, the Quality Score (“QS”) is the average difference between the two quality ratios (ROE, GM) and their baselines (ROEh, GMh).

The scores are in percentage points. VS may be interpreted as the percentage of undervaluation or overvaluation relative to the baseline (positive is good, negative is bad). This interpretation must be taken with caution: the baseline is an arbitrary reference, not a supposed fair value. The formula assumes that the two valuation ratios are of equal importance.

Current data

The next table shows the metrics and scores as of last week’s closing. Columns stand for all the data named and defined above.

VS

QS

EY

SY

FY

ROE

GM

EYh

SYh

FYh

ROEh

GMh

RetM

RetY

Gas

0.08

-2.23

0.0561

0.5210

-0.0946

9.04

36.75

0.0479

0.6274

-0.0603

9.40

37.00

2.39%

6.23%

Water

-30.89

4.54

0.0286

0.1568

-0.0446

10.40

56.06

0.0374

0.2539

-0.0321

9.63

55.43

0.31%

-6.61%

Electricity

-14.91

-2.34

0.0486

0.4036

-0.0809

9.37

38.60

0.0518

0.5286

-0.0455

9.82

38.64

3.67%

2.01%

Value and Quality chart

The next chart plots the Value and Quality Scores by industry. Higher is better.

Value and quality in utilities

Value and quality in utilities (Chart: author; data: Portfolio123)

Evolution since last month

The value score has improved in gas utilities and deteriorated in electricity.

Variation in value and quality

Variation in value and quality (Chart: author; data: Portfolio123)

Momentum

The next chart plots momentum data.

Momentum in utilities

Momentum in utilities (Chart: author; data: Portfolio123)

Interpretation

Gas utilities look the safest industry in the sector regarding fundamental data: valuation and quality metrics are close to 11-year averages. They also have the highest 12-month median momentum with +6.2%. Electricity and water are overvalued by about 15% and 31% relative to their historical baseline. Their quality scores don’t justify such overvaluation.

Fast facts on FUTY

The Fidelity MSCI Utilities Index ETF has been tracking the MSCI USA IMI Utilities 25/50 Index since 10/21/2013. The expense ratio of 0.08% is a bit cheaper than for XLU (0.10%).

As of writing, the fund has 69 holdings. The next table lists the top 10 names with fundamental ratios and dividend yields. Their aggregate weight is 52.2%.

Ticker

Name

Weight

EPS growth %TTM

P/E TTM

P/E fwd

Yield%

NEE

NextEra Energy, Inc.

14.20%

61.60

43.45

29.26

2.02

DUK

Duke Energy Corp.

6.57%

27.82

20.19

18.91

4.01

SO

The Southern Co.

6.13%

12.59

22.00

19.41

3.92

SRE

Sempra Energy

4.46%

94.05

22.09

17.92

2.91

AEP

American Electric Power Co.

4.24%

1.09

19.63

18.83

3.51

D

Dominion Energy, Inc.

4.23%

-12.42

21.11

14.24

4.55

EXC

Exelon Corp.

3.46%

26.65

19.37

18.54

3.22

XEL

Xcel Energy, Inc.

3.26%

4.91

22.82

22.08

2.79

ED

Consolidated Edison, Inc.

2.96%

42.49

19.97

20.99

3.32

CEG

Constellation Energy Corp.

2.68%

N/A

N/A

31.36

0.64

Ratios: Portfolio123

FUTY and XLU show similar performances and risk metrics since FUTY inception. The difference in annualized return, drawdown and risk-adjusted performance (Sharpe ratio) is insignificant.

FUTY vs XLU since inception: almost identical path

FUTY vs XLU since inception: almost identical path (Portfolio123)

In summary, FUTY is a good instrument with cheap fees for investors seeking capital-weighted exposure in utilities. It has more holdings than XLU (currently 69 vs. 32), but past performance is almost identical. The two funds are equivalents for long-term investors. However, XLU is a better choice for tactical allocation and trading because it has a much higher trading volume. Both funds have a high exposure to the top holding: NextEra Energy weighs over 14%. Investors worried by concentration may prefer the Invesco S&P 500 Equal Weight Utilities ETF (RYU).

Dashboard List

I use the first table to calculate value and quality scores. It may also be used in a stock-picking process to check how companies stand among their peers. For example, the EY column tells us that an electricity company with an Earnings Yield above 0.0486 (or price/earnings below 20.58) is in the better half of the industry regarding this metric. A Dashboard List is sent every month to Quantitative Risk & Value subscribers with the most profitable companies standing in the better half among their peers regarding the three valuation metrics at the same time. The list below was sent to subscribers several weeks ago based on data available at this time.

FE

FirstEnergy Corp.

HE

Hawaiian Electric Industries, Inc.

BKH

Black Hills Corp.

NJR

New Jersey Resources Corp.

CMS

CMS Energy Corp.

POR

Portland General Electric Co.

ETR

Entergy Corp.

DTE

DTE Energy Co.

NRG

NRG Energy, Inc.

NI

NiSource, Inc.

It is a rotating list with a statistical bias toward excess returns in the long term, not the result of an analysis of each stock.



Source link

Tags: DashboardDecemberFUTYNYSEARCAFUTYUtilities
ShareTweetShareShare
Previous Post

Schools close as Pakistan Taliban siege on police station drags on

Next Post

Credit Suisse downgrades Home Depot, cites slowing housing market as near-term risk

Related Posts

Dividend Champion, Contender, And Challenger Highlights: Week Of June 1

Dividend Champion, Contender, And Challenger Highlights: Week Of June 1

by Index Investing News
May 31, 2025
0

This text was written byObserveJustin Legislation has a Ph.D in Chemistry from Rice College and has earned the CFA Institute...

Report: Tariff Influence on B2B Resale Market

Report: Tariff Influence on B2B Resale Market

by Index Investing News
May 30, 2025
0

As tariff threats proceed to disrupt world provide chains and drive up retail costs, each retailers and customers are rethinking...

Why I Imagine Tesla Will Quickly Grow to be Unprofitable (NASDAQ:TSLA)

Why I Imagine Tesla Will Quickly Grow to be Unprofitable (NASDAQ:TSLA)

by Index Investing News
May 30, 2025
0

This text was written byComply withHello there, welcome to my profile. My identify is Eugenio Catone, I reside in Italy...

Is the Subscription Definitely worth the Price?

Is the Subscription Definitely worth the Price?

by Index Investing News
May 30, 2025
0

For critical buyers, real-time info and knowledgeable insights could make the distinction between commerce and a fantastic one. CNBC Professional...

Salesforce, Inc. (CRM) Jefferies Public Know-how Convention (Transcript)

Salesforce, Inc. (CRM) Jefferies Public Know-how Convention (Transcript)

by Index Investing News
May 29, 2025
0

Salesforce, Inc. (NYSE:CRM) Jefferies Public Know-how Convention Could 29, 2025 3:00 PM ET Firm Contributors Invoice Patterson - EVP, Company...

Next Post
Credit Suisse downgrades Home Depot, cites slowing housing market as near-term risk

Credit Suisse downgrades Home Depot, cites slowing housing market as near-term risk

ANC leadership battle is over, now we must build a better life for all

ANC leadership battle is over, now we must build a better life for all

Comments 2

  1. Pingback: FUTY:12 月的公用事业仪表板(NYSEARCA:FUTY) - 光速日链网
  2. Pingback: FUTY:12 月的公用事业仪表板(NYSEARCA:FUTY) - 每日金融资讯网

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED

King Charles Poses For 74th Birthday Portrait, His 1st As Monarch – Hollywood Life

King Charles Poses For 74th Birthday Portrait, His 1st As Monarch – Hollywood Life

November 15, 2022
Coal India, Vedanta among 5 metal stocks that recorded highest profit in Q3 – ​Outperformers

Coal India, Vedanta among 5 metal stocks that recorded highest profit in Q3 – ​Outperformers

March 23, 2024
Should You Use Lively to Manage Your HSA Account?

Should You Use Lively to Manage Your HSA Account?

November 28, 2022
Is It Price Paying the Further Charges?

Is It Price Paying the Further Charges?

March 26, 2022
Securing Africa's power future begins at house: discovering an area answer to a world problem

Securing Africa's power future begins at house: discovering an area answer to a world problem

April 9, 2025
Horizon Know-how Finance (HRZN) | Month-to-month Dividend Security Evaluation

Horizon Know-how Finance (HRZN) | Month-to-month Dividend Security Evaluation

April 23, 2022
A Deep Dive Into Resilience and Reinvention – Hollywood Life

A Deep Dive Into Resilience and Reinvention – Hollywood Life

January 30, 2025
WATCH: NASA’s Artemis I Orion spacecraft splashdown

WATCH: NASA’s Artemis I Orion spacecraft splashdown

December 11, 2022
Index Investing News

Get the latest news and follow the coverage of Investing, World News, Stocks, Market Analysis, Business & Financial News, and more from the top trusted sources.

  • 1717575246.7
  • Browse the latest news about investing and more
  • Contact us
  • Cookie Privacy Policy
  • Disclaimer
  • DMCA
  • Privacy Policy
  • Terms and Conditions
  • xtw18387b488

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In