Key Points:

• VST is the top-performing S&P 500 stock, outperforming Nvidia.
• Utility stocks are in demand due to reliable dividends and expected interest rate cuts.
• Consider smaller utility stocks or the utility index (XLE) for diversification.
• With the competition heating up for Nvidia, investors are already starting to look ahead to 2025’s best investments. See what the hype is all about here.

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Edited Video Transcript:

[00:00:00] Douglas A. McIntyre: is the best performing, uh, S and P 500 stock this year, even better than NVIDIA. Yep. Most people have not heard of it. So. Then I don’t know much about it. So

[00:00:15] Lee Jackson: tell me about it. Well, they’re extremely successful utility and utility stocks. And the sector itself has been on a rampage this year and literally up over 20 percent for the utility index.

[00:00:29] Lee Jackson: And for years, uh, the only people buying utility stocks were, uh, widows, orphans, and, you know, people like that. My parents when I was young, but the expansion of need for electricity is huge. And they’ve all had a big year, whether it’s Duke or Dominion or, or any of the energy, any of the big them, they’re all trading at 52 week eyes or wrote a recent piece about it, looking for yield still there.

[00:00:57] Lee Jackson: And you know what, they’re going to continue to go higher because interest rates are going to continue to fall and dividend paying stocks. especially safe dividend stocks like utilities, because the product is always in demand. You can, you know, there’s a lot of products in this world you can do without, but utility or electricity isn’t one of them.

[00:01:15] Lee Jackson: And as Yields continue to fall. The Wall Street expects another 50 basis points this year, probably 25 in November and 25 in December. They’ll sit out October in front of the election and then another 100 basis points in 2025 and then perhaps even another Uh, cut in 2026. So fed funds, which is now like 475 to five, could it be three and a quarter to three or three to three and a quarter?

[00:01:45] Lee Jackson: And these stocks like VST will be in big demand, Doug.

[00:01:50] Douglas A. McIntyre: So I, the other thing that I tend to like about this industry and you’ve already hinted at it is, is that. It’s it’s, it doesn’t go away, you know, it’s like phone lines, railroad tracks, the interstate it’s, it’s basically part of the American infrastructure and it’s absolutely critical.

[00:02:13] Douglas A. McIntyre: To whether you’re residential or a commercial client, you need electricity and we’ll get into this down the road. But the demand for electricity is, is hockey sticking because of, uh, how much electricity, Bitcoin mining and, and AI takes. So look for those of you who, uh, like you, if you like this sector, there’s one question you have to ask yourself.

[00:02:41] Douglas A. McIntyre: If it is up more than any other stock in the S& P 500, does it still have a ways to run? It’s possible, you know, some stocks like NVIDIA just keep going up or should you look at An alternative stock that’s in basically the same sector.

[00:02:58] Lee Jackson: Well, and you can, you know, you can always buy the, the, I think it’s the XLE, which is the utility index.

[00:03:03] Lee Jackson: You can always buy that. And, and, and also you can sift through, uh, you know, and maybe look for smaller utilities like Black Hills. And, and, and Northwest. And, you know, ones like that, that are actually in the dividend aristocrats and dividend Kings, cause they paid dividends for 50 years. Black Hills still yields over 5 percent at this level.

[00:03:25] Lee Jackson: So maybe, you know, lower your sights from the, you know, from the BSTs and the constellations and the huge companies, the consolidated ed in New York. And look, maybe it’s some of the smaller ones that we often feature on 24 seven wall street.

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