FUTY: Utilities Dashboard For July

seekingalpha07-23

Monty Rakusen 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® Fund ETF ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2453313035?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/108442571/image_108442571.jpg","is_english":true,"pubTime":"2024-07-23 20:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2453313035","market":"sg","top_or_hot":-1,"title":"FUTY: Utilities Dashboard For July","media":"seekingalpha","content":"<div>\n<p>Monty Rakusen 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® Fund ETF ...</p>\n\n<a href=\"https://seekingalpha.com/article/4705602-futy-utilities-dashboard-for-july\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>FUTY: Utilities Dashboard For July</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFUTY: Utilities Dashboard For July\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-23 20:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4705602-futy-utilities-dashboard-for-july><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Monty Rakusen 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® Fund ETF ...</p>\n\n<a href=\"https://seekingalpha.com/article/4705602-futy-utilities-dashboard-for-july\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RSPU","symbol_name":"Invesco S&P 500 Equal Weight Utilities ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4705602-futy-utilities-dashboard-for-july","article_id":"2453313035","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/108442571/image_108442571.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2453313035","pubTimestamp":1721736000,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Monty Rakusen 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 Fund ETF (","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"RSPU":"Invesco S&P 500 Equal Weight Utilities ETF","XLU":"公共事业指数ETF-SPDR","BK4585":"ETF&股票定投概念","BK4561":"索罗斯持仓","BK4588":"碎股","BK4550":"红杉资本持仓","FDN":"First Trust Dow Jones Internet I","FUTY":"Fidelity MSCI Utilities Index ETF"},"translate_title":"FUTY：7月份公用事业仪表板","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FUTY":1,"RSPU":1,"XLU":1,"FDN":0.9},"content_text":"Monty Rakusen 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® Fund ETF (XLU) and 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 in 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 writing. Columns stand for all the data defined above.     VS QS EY SY FY ROE GM EYh SYh FYh ROEh GMh RetM RetY   Gas 2.07 7.40 0.0582 0.4648 -0.0642 9.11 42.70 0.0477 0.5659 -0.0610 9.20 36.90 9.85% 0.56%   Water -5.07 3.80 0.0406 0.1701 -0.0608 9.84 59.72 0.0357 0.2234 -0.0344 9.79 55.79 12.64% -4.94%   Electricity and Multi -2.20 9.43 0.0527 0.4349 -0.0780 10.62 43.26 0.0501 0.4810 -0.0560 9.77 39.29 4.87% 4.93%   Click to enlarge Value and Quality chart The next chart plots the Value and Quality Scores by industry. Higher is better. Value and quality in utilities (Chart: author; data: Portfolio123) Evolution since last month The value score has slightly deteriorated across the sector, the most in water utilities. Variation in value and quality (Chart: author; data: Portfolio123) Momentum The next chart plots momentum scores based on median returns. Momentum in utilities (Chart: author; data: Portfolio123) Interpretation Based on my monthly S&P 500 dashboard, the utilities sector as a whole is close to its 11-year average in valuation metrics. Gas utilities are marginally undervalued, while water, electricity and multi-utilities are slightly overvalued. Quality is over the historical baseline in all subsectors. Fast facts on FUTY Fidelity MSCI Utilities Index ETF started investing operations on 10/21/2013 and tracks the MSCI USA IMI Utilities 25/50 Index. The expense ratio is similar to the SPDR ETF XLU (0.08% vs. 0.09%). The portfolio is quite concentrated: the top 10 holdings, listed in the next table with fundamental ratios, represent 53.7% of asset value. The four heaviest positions weigh between 5% and 13% individually and 32.5% in aggregate.   Ticker Name Weight% EPS growth %TTM P/E TTM P/E fwd Yield%   NEE NextEra Energy, Inc. 12.74 9.21 19.62 21.13 2.86   SO The Southern Co. 7.42 25.10 21.05 20.23 3.54   DUK Duke Energy Corp. 6.78 26.81 25.87 17.90 3.91   CEG Constellation Energy Corp. 5.53 1545.21 25.27 24.57 0.74   SRE Sempra 4.21 16.49 17.17 16.20 3.20   AEP American Electric Power Co., Inc. 4.05 39.43 17.32 16.57 3.78   D Dominion Energy, Inc. 3.60 33.80 27.07 18.50 5.19   PEG Public Service Enterprise Group, Inc. 3.22 -22.07 20.64 20.33 3.22   PCG PG&E Corp. 3.10 24.32 16.00 13.26 0.22   EXC Exelon Corp. 3.03 2.67 15.56 14.81 4.21   Click to enlarge Ratios: Portfolio123. FUTY is shortly behind XLU in total return since inception. Nevertheless, the gaps in annualized return, maximum drawdown and volatility are insignificant, as reported in the next table. The two funds have the same risk-adjusted performance measured by Sharpe ratio.     Total Return Annual. Return Drawdown Sharpe ratio Volatility   FUTY 152.42% 9.01% -36.44% 0.55 14.80%   XLU 156.29% 9.17% -36.07% 0.55 15.03%   Click to enlarge Aggregate valuation ratios and growth rates are also very close:     FUTY XLU   Price/earnings 19.81 18.89   Price/book 2.09 2.06   Price/sales 2.53 2.47   Price/cash flow 8.65 8.4   Earnings growth 14.31% 14.67%   Sales growth 3.13% 2.63%   Cash flow growth 23.21% 25.01%   Click to enlarge Source: Fidelity. FUTY provides a capital-weighted exposure to utilities for a cheap fee. It has more holdings than XLU (currently 68 vs. 33), but performance, valuation, and growth metrics are almost on par. These two funds are equivalents for long-term investors. Nonetheless, XLU is more appropriate for trading strategies, thanks to much higher trading volumes. Both funds have a high exposure to the top holding NextEra Energy. Investors looking for a more balanced portfolio may prefer Invesco S&P 500 Equal Weight Utilities ETF (RSPU). 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 a gas utilities company with an Earnings Yield above 0.0582 (or price/earnings below 17.18) is in the better half of the industry regarding this metric. A Dashboard List is sent every month to our subscribers with the most profitable companies standing in the better half among their peers regarding the three valuation metrics at the same time. The stocks below are part of the list sent to subscribers a few weeks ago, based on data available at this time.   NRG NRG Energy, Inc.   BKH Black Hills Corp.   ALE ALLETE, Inc.   UTL Unitil Corp.   PCG PG&E Corp.   OGS ONE Gas, Inc.   PNW Pinnacle West Capital Corp.   EXC Exelon Corp.   ETR Entergy Corp.   CWT California Water Service Group   Click to enlarge  It is a rotational model with a statistical bias toward excess returns in the long term, not the result of an analysis of each stock.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2453313035"}