The best opportunities today are in value stocks, meaning names trading at about a 22% discount to fair value, he said.
Morningstar estimates fair value based on its projection of a company's future cash flows and the predictability of those flows.
In fact, year-to-date, many utilities stocks have fallen by more than even long-dated bonds.
What's great about utilities stocks is that they are very steady because demand for electricity is inelastic.
It's a five-star-rated stock trading at a 23% discount to fair value and has about a 4.58% dividend yield.
Persons:
Dave Sekera, Sekera, Travis Miller, It's
Organizations:
Stocks, Morningstar, Treasuries, NextEra Energy, Duke Energy, Electric Power Company
Locations:
AEP