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Pay Attention to Your NU Stock

For those of you who hold NU stock, you may be excited to see that it has been reaching new all-time highs at over $47 per share! So, let’s take some time to evaluate it as an investment. Recently, we noticed an abnormality that warrants some discussion:

  1. With some unease in the market, investors flocked to a more conservative investment, many of whom turned to utilities for their relatively stable performance and nice dividend. NU pays an annual dividend of $1.57 per share which is a yield of 3.38%. It’s paid off for investors so far this year. The utility industry has been doing very well compared to the S&P 500 so far this year. This, in part, has contributed to the healthy performance for the NU stock.
  2. But comparing the NU stock to it’s peers (other utilities) paints a different picture. NU outperformed its peers for most of 2013. But in 2014, it started to lag. While NU has been performing well this year, the industry as a whole has been doing better.
  3. S&P has recently downgraded their opinion on NU shares to “Hold”, from “Buy”. The rating agency also forecasts the price of the stock 12-month from now to be around $47.

We’re not suggesting that you sell out of NU. Such recommendations are made on a case-by-case basis only. But it’s important to put this performance in perspective. Now may be a good time to evaluate the position to make sure it’s still an appropriate investment.