The latest Fed meeting minutes suggest the central bank may continue to raise interest rates. However, the steady increases of the past year are over. With interest rates likely near, if not at, their cycle peak, some investments look better than others.
Fixed income could perform well here, as prices on assets like bonds will rise as interest rates move lower. But it’s also likely that we’ve seen the worst of the selloff in defensive parts of the market, such as utility stocks.
That’s because utilities tend to be bond-like investments, given their low growth profile and steady cash flows. Some utilities in areas with a growing population can also be growth plays. That includes NextEra Energy (NEE).
The Florida-based utility is increasing its sustainability with several forms of green energy, and shares are now near a 52-week low with insider buying.
Action to take: Today’s investors can buy shares under 17 times earnings, and grab a 2.7 percent dividend with a history of increasing over time. Today’s buyers may want to start with a small buy and add on any further drop.
For traders, shares are oversold in the short-term and are due for a bounce. The November $70 calls, last going for about $2.50, could see mid-double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.