3 Utility Stocks to Buy on Imminent September Rate Cut

Industry Overview - The utilities sector is recognized for providing a steady source of income through dividends, making it a preferred choice for investors during economic downturns [1] - Utility stocks are classified as defensive stocks, showing minimal impact from market volatility, and have historically performed well during financial crises, such as the 2008 crisis [2] Current Economic Context - The market anticipates interest rate cuts in September, marking a potential shift in monetary policy after a tightening period that began in early 2022, with expectations of at least two rate cuts this year due to signs of economic slowdown [3] - Inflation has significantly decreased recently, and while the jobs market has slowed, it remains robust, suggesting that once the Federal Reserve initiates rate cuts, they may occur rapidly [4] Performance Metrics - The utilities sector has performed well in 2024, with the S&P 500 Select Sector SPDR (XLU) increasing by 16.7% year-to-date as of July 31, 2024, indicating strong investor interest in utility stocks during macroeconomic downturns [4] Investment Considerations - Utility stocks are typically viewed as long-term buy-and-hold investments due to their regular dividend declarations and generally higher dividend yields compared to other equities, providing stability and growth potential [5] Company Highlights - UGI Corporation (UGI) is an integrated gas distributor with an expected earnings growth rate of 2.8% for the current year and holds a Zacks Rank 2 with a VGM Score of B [7] - Northwest Natural Holding Company (NWN) focuses on natural gas distribution and has an expected earnings growth rate of 2.5% for the next year, with a 26.3% improvement in the Zacks Consensus Estimate over the past 60 days, also holding a Zacks Rank 2 and a VGM Score of B [8] - Veolia Environnement SA (VEOEY) provides global water, waste, and energy management solutions, with an expected earnings growth rate of 207% for the current year and a slight improvement in the Zacks Consensus Estimate, holding a Zacks Rank 1 and a VGM Score of B [9]