M&A Activity May Charge Up Utility ETFs | ETF Trends

Utility companies are taking new measures to help offset the rising production costs, giving exchange traded funds (ETFs) and shares some attention.

To combat rising costs, companies in the electric utilities sector have been looking toward mergers and acquisitions to keep profits steady and maintain their appealing dividends, reports MarketWire.[Opportunity Lights Up Utility ETFs.]

Duke Energy (NYSE: DUK) announced that it has agreed to buy Progress Energy (NYSE: PGN) for $13.7 billion in stock. Pending approval from regulators in North and South Carolina, the deal will create the largest U.S. power company. [Yield Pig for Business Insider reports. [The Appeal of Boring Utility ETFs.]

The yields in utility stocks and ETFs are very attractive, especially for a sector that’s often noted for its stability. Check out:

  • Rydex S&P Equal Weight Utilities (NYSEArca: RYU) yields 3.3%
  • iShares S&P Global Utilities Secto (NYSEArca: JXI) yields 5.4%
  • Utilities Select Sector SPDR (NYSEArca: XLU) yields 4%

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.