Global utility stocks are typically considered defensive in nature because the dependable reoccurring cash flows they generate make them somewhat bond-like.
Watch the video or read the recap below.
Stocks in global utilities are typically thought to be quite defensive in nature because the dependable reoccurring cash flows they generate make them somewhat bond-like.
Global utilities have held up their end of the bargain.
While utilities navigate lower volumes of electricity delivered to businesses and industrial customers, volumes delivered to homes and residences are stable to growing.
Within the renewables complex, there is a chance that we might see increased investment.
Within the renewables complex, which is a growth engine within utilities, there is a chance that we might see increased investment as low oil prices accelerate the energy transition from high-Co2-emitting power-generating types to green energy.
Even in sectors that have old-economy business models, we are finding companies that employ models that are less capital-intensive, more flexible, and management teams that have the growth mindset needed to adapt through the COVID-19 crisis.
Alaina Anderson, CFA, partner, is a portfolio manager and research analyst on William Blair’s Global Equity team.