These Stocks Beat Gold Stocks

It seems only natural to believe that gold investors must be raking in the profits during such tenuous times. But there are investments from other sectors that are beating the pants off gold stocks -- and I know where you can find out more about them.

Would the real hot stocks please come forward?
The nearly 5,400 stocks that more than 120,000 Motley Fool CAPS community members have rated include descriptive "tags" that group them with other companies sharing similar qualities -- a country of origin, a sector, or an end product, for example. Clicking the Gold tag pulls up a list of 29 stocks that have collectively lost 41.1% in the past year, almost as much as the S&P 500.

But CAPS tags can lead you to stocks that have outpaced both the Gold group and the S&P: Electric Utilities. This group comprises 65 companies that have outperformed the returns of the broader market and the Gold group, with only a 23.7% average loss in the past year.

Each group has its share of winners and losers, of course, but CAPS can be a great resource for zeroing in on potential opportunities in each area.

From macro to micro
You can sort tag groups by their CAPS ratings, from one to a maximum five stars, and then see which players -- from Wall Street to Main Street -- are bullish or bearish on a company, and why.

For instance, here are a few of the stocks in the Gold group:

Rating from Motley Fool CAPS; returns from Yahoo! Finance. All data as of Nov. 18.

Now, based on the interest in the CAPS community, here's a sampling of Electric Utilities stocks that investors may want to consider.

Rating from Motley Fool CAPS; returns from Yahoo! Finance. All data as of Nov. 18.

Southern comfort
A stable performer during the market chaos, Southern Company’s conservative approach has earned it market-beating returns -- which also have it sitting in a better financial position than many of its peers. The utility has benefited from its focus on the southeast U.S. market, and it recently reported third-quarter earnings of $780.4 million, up from $762 million a year ago.  

The strong and stable cash flow powers the quarterly dividend -- which now yields nearly 5% annually -- that the company has paid consecutively since 1948. This makes the stock well-suited for investors who hold a long-term focus, and thus are willing to give up the expectation of an overnight double in return for the enjoyment of a solid dividend and even more impressive compounding returns. Overall, 93% of the 489 CAPS members rating Southern Company expect it to outperform the market.

The Duke of energy
As one of the largest electric energy companies in the U.S., Duke Energy serves about 4 million customers and has been paying a dividend for 82 straight years. It has even outperformed the S&P 500 in the last one-, three-, and five-year periods, a feat even many of the world's best companies cannot claim today.

But the company still has its share of near-term blips -- it reported less-than-expected third-quarter earnings because of what the company claimed to be the worst Midwest storm-related outages ever. It also took some hedging charges and drew $1 billion from its credit facility. The company has been proactive in adjusting to the changing economic environment, though, reducing capital expenditures and delaying some of its discretionary projects until later dates.

The company has been making a big push into wind power, too; it purchased about 100 wind turbines from General Electric (NYSE:GE) last year. It also recently began operations at its new Howard County, Texas, wind farm, and it has a 50% ownership in the Sweetwater Project in Texas, one of the largest wind operations in the world.

Many CAPS members like Duke’s balance of strong fundamentals with its forward-looking vision into new areas of wind power. As such, 95% of the 1,428 CAPS members rating Duke Energy expect it to outperform the market going forward.

Before you buy ...
Of course, what's happened in the past is no indicator of where investors should be putting their capital now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify trends that may significantly affect investments. Just make sure to do your own due diligence, rather than simply following crowds or individual recommendations.