Utility companies represent a compelling investment opportunity due to their indispensable nature in providing services like heating, water, electricity, gas, etc. These companies are strategically positioned for long-term growth as the world embraces cleaner energy sources.
Therefore, it could be prudent for investors to consider adding some exposure to high-rated utility stocks, such as Enel SpA (ENLAY – Get Rating), Centrica plc (CPYYY – Get Rating), and TransAlta Corporation (TAC – Get Rating), to strengthen your portfolio.
Last month, the Federal Reserve announced another quarter-point hike, lifting interest rates to their highest level in 22 years. Also, it dropped a tentative hint that another rate hike could be on the cards this year.
With volatility gripping the markets, investing in utility stocks could help add a defensive layer to your portfolio. As utilities are a necessity, companies in this sector are often resilient in a tumultuous market situation.
Further, the utility markets are poised for significant growth due to the rapid expansion of renewable power generation capacities. Governments worldwide are promoting the use of renewable energy sources by providing incentives and subsidies to solar power generation companies. As a result, the global utility market is expected to reach $8.31 trillion by 2027, growing at a CAGR of 6.8%.
Thus, those looking to hedge against market uncertainty this year could consider adding fundamentally robust utility stocks ENLAY, CPYYY, and TAC.
Let’s take a closer look at the fundamentals of the featured stocks…
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