Electricity Utilities Should Do Well For A Little Longer.

Utilities tend to be the boring but stable part of most investors' portfolios. With their steady income streams and reliable dividends, they tend to act as a bond with a growing coupon would. They also tend to have low Betas, i.e. low reactivity to broader market swings.

Current market conditions favor electric utility stocks on several fronts:

1. Low energy input prices, such as gas, oil and coal are expected for the foreseeable future.
2. As bond equivalents, they should lose favor as interest go up. Few investors are expecting any large moves from the Fed and other Central Banks have only just begun to flood the markets with liquidity, thus keeping interest rates on the low side.
3. As US GDP is expected to keep growing throughout 2015, electricity usage should be stable.

If oil and coal prices go up, or interest rates begin going up, this could likely bring utility stocks down as prices go up and bond yields become more attractive.

Two stocks I find attractive are Consolidated Edison (ED) and PG&E Corporation (PCG). They are both well ranked within the industry, have favorable earnings momentum and comfortably below their Price Targets.

I am currently using a Positive Delta, Positive Theta option spread strategy on both these low Beta plays. I can profit as long as price stays near or above the strike prices I use on each.