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Certain sectors have been favored extensively by investors over the last couple of years as low interest rates have persisted. One of the biggest recipients of this favoritism has been utility stocks.

Shares of power, water and gas utilities have been on a continual rise upwards since the Great Recession, as investors flocked to them due to their hefty dividend yields. Driving those yields has been the steady nature of their underlying businesses. After all, you need to keep the lights on whether the economy is doing well or not.

Despite the investor love, the last few months haven’t exactly been kind to the utilities. Various threats and problems have begun to make themselves known. The question is, do the utility stocks have what it takes to power themselves over the hump or are they doomed to short out?

Utilities are one of the most recession-proof industries. Find out other such sectors and industries here.

Rising Rates

It’s easy to understand why investors were drawn to utility stocks over the last few years. The simple answer is 3.39% – which just happens to be the dividend yield on the popular Utilities Select Sector SPDR Fund (XLU).

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