The US stock market has seen significant declines since the beginning of the year. The broader S&P 500 index has lost nearly 8% of its 52-week highs, while the utilities sector (energy, gas and water) has held steady. Investors are therefore focusing their attention on this defensive segment, which offers reliable returns even in times of uncertainty.
Energy sector resilience
Utility companies provide key infrastructure and their stable earnings make them an attractive investment not only during economic downturns but also during periods of heightened market volatility. In addition to regular dividends, technical signals are now coming to the fore, indicating the potential for further growth.
Duke Energy – a stable leader with growth potential
Duke Energy is the third-largest company in the sector, and its stock is up about 10.5% since the beginning of the year. The company, which is one of the largest electricity and gas utilities in the U.S., pays an attractive dividend of 3.5% and trades at a price-to-earnings (P/E) ratio of 20.8.
From a technical perspective, its stock is above the important 50-day moving average, indicating continued investor interest. If the market stabilizes, Duke Energy could strengthen to the $80 per share mark, which would confirm a further uptrend.
Southern Company – a reliable investment with stable returns
Another strong company is Southern Company, the second largest player in this sector, which supplies power and gas to a large part of the southern US states. Despite the overall market downturn, its shares are up around 8% since the start of the year.
Southern Company offers a dividend yield of 3.25% and has a market value of just under $100 billion. Its defensive nature makes it a stable investment choice that provides protection from market fluctuations while allowing for long-term growth.
An investment opportunity ?
Both Duke Energy and Southern Company offer an interesting risk/reward ratio in times of uncertainty. The resilience of the energy sector and the ability of these companies to generate stable revenues from essential services make them solid investment pillars even during market turbulence. If the market situation improves, technical signals suggest the possibility of further upside for both stocks. Investors looking for both stability and growth potential may find these stocks an attractive choice.
