Why Utilities Outshine Big Oil

Group 1 - Corporations report profits that may not always lead to higher stock prices due to the quality of earnings, which refers to their reliability, sustainability, and whether they stem from actual sales or accounting practices [1] - The market evaluates earnings based on the risk associated with them, leading to situations where increased earnings do not necessarily result in higher stock valuations [1] - The oil industry's earnings have shown improvement from poor to mediocre, indicating that despite better numbers, the overall situation remains concerning [1] Group 2 - A chart shows average annual total returns from 2000 to 2024 for various asset classes, indicating that the stock market generally outperforms bonds over time [2] - The gap of approximately 4 percentage points between the stock market and bonds aligns with historical trends, but low-risk stocks performed better than expected relative to the market [4] - The performance of low-risk stocks during periods of economic downturns suggests that riskier stocks faced challenges in outperforming the market [4] Group 3 - A subsequent chart displays average annual total returns for the 10 years ending September 25, 2025, where the market significantly outperformed low-risk stocks and bonds [5] - Electricity and water stocks outperformed oil stocks during this period, highlighting a shift in performance among low-risk categories [5]